Daily Australia Tax Update: 26 September 2026, 31 October Return Deadline Warning, $1bn Contractor Income Gap & ATO Refreshes GILTI Guidance

Sep 26, 2026 | Australia Updates

TITLE: ATO Compliance Update: 2025–26 Return Deadlines, Pre-Fill Data, Contractor Reporting and GILTI/NCTI Changes

Prepare your 2025–26 return before the 31 October deadline

If you self-lodge your 2025–26 individual income tax return, the standard deadline is 31 October 2026. Because 31 October falls on a Saturday, the ATO’s next-business-day rule generally means the practical lodgement date moves to Monday 2 November 2026.

Do not leave your return until the final weekend. You still need time to:

Reconcile business income and expenses.
Check GST and BAS records.
Review platform, marketplace and payment-provider reports.
Confirm contractor and payroll information.
Check share, interest and dividend data.
Investigate missing or incorrect pre-filled amounts.
Resolve any outstanding prior-year returns.

If you use a registered tax agent, you generally receive access to the agent lodgement program and an extended due date. However, you must be engaged and on the agent’s books by 31 October 2026.

Taxpayers with overdue prior-year returns may not receive the usual extension. The ATO’s registered agent program includes specific rules for taxpayers who had returns outstanding at 30 June 2026. Treat 31 October as a hard deadline if your previous lodgements are incomplete.

Avoid failure-to-lodge penalties

The ATO can apply a failure-to-lodge penalty when a required return is lodged late. The penalty is generally:

One penalty unit for each 28-day period, or part period, overdue.
Capped at five penalty units for individuals and small entities.
Based on a penalty unit value of $364 from 1 July 2026.
Potentially as high as $1,820.

The ATO does not automatically apply the maximum penalty to every late return. Remission may be available in appropriate circumstances. However, relying on remission is not a compliance process. Lodging on time reduces penalty exposure, interest and unnecessary ATO correspondence.

Review the ATO’s October 2026 registered agent lodgement information and organise your records now.

Check every pre-filled amount before you lodge

The ATO is now pre-filling more than 100 million data items from employers, banks, health insurers, share registries, government agencies and other reporting bodies.

This makes tax returns faster to complete. It also makes discrepancies easier to identify.

Pre-fill is not a substitute for your own accounting records. You remain responsible for reporting complete and accurate income.

For an e-commerce seller or digital business, compare your tax records with:

Shopify, Amazon, eBay, Etsy or other marketplace reports.
Payment processor settlements.
Business bank statements.
Refunds, chargebacks and platform fees.
Foreign currency receipts and exchange-rate adjustments.
Sales recorded through separate websites or payment links.
Income received directly from customers.
Stock, advertising and fulfilment costs.

A platform report may show gross sales, while your bank account shows net settlements after fees, refunds or reserves. Reconcile the underlying transactions rather than copying one figure into your return. Doing this will reduce errors and give you a defensible audit trail.

The ATO’s 2026 pre-filling information explains how third-party data is used during Tax Time 2026.

Report contractor income accurately before the ATO matches it

The ATO is warning that more than $1 billion in taxable payments annual report (TPAR) income could be omitted or under-reported in tax returns this year.

At the same time, approximately $21 billion in TPAR payments is being pre-filled into eligible returns. The new pre-fill process is expected to support around 700,000 sole traders and individuals in business.

ATO Assistant Commissioner Tony Goding’s message is direct: leaving income out of a tax return does not make it invisible.

If you change a pre-filled amount, you must have a genuine reason and retain documents supporting the adjustment. For example, the amount may need correction because:

The payer reported the wrong figure.
The payment belongs to a different entity.
The payment was duplicated.
The transaction was recorded on a different accounting basis.
The amount includes non-reportable components.
The income was received through another reporting arrangement.

Do not remove or reduce a pre-filled figure simply because it does not match your bank deposit. First identify the difference between gross contractor payments, expenses, GST, withholding, refunds and net settlement amounts.

The ATO estimates that shadow economy behaviour costs around $25 billion in tax each year. Data matching is therefore becoming a core compliance control, not an occasional check.

Read the ATO’s Tax Time 2026 contractor pre-fill update and reconcile your TPAR information with your invoicing and bookkeeping system.

Review Australian-US structures under the refreshed NCTI guidance

On 23 September 2026, the ATO issued an addendum to Taxation Determination TD 2022/9.

The addendum reflects US changes introduced by the One Big Beautiful Bill Act 2025. The former US GILTI regime is now referred to as net CFC tested income, or NCTI.

The US changes include:

The removal of the net deemed tangible income return.
A reduction in the US section 250 deduction from 50% to 40%.
An increase in the deemed paid foreign tax credit under section 960(d) from 80% to 90%.
Application for US tax years beginning after 31 December 2025.

The important Australian point is that the ATO’s view has not changed.

For Australia’s hybrid mismatch rules, the ATO continues to consider that section 951A of the US Internal Revenue Code does not correspond to Australia’s controlled foreign company provisions in sections 456 or 457 of the ITAA 1936.

As a result, Australian businesses should not automatically treat US GILTI or NCTI inclusions as being “subject to foreign income tax” for the purposes of the hybrid mismatch rules.