TITLE: Australian Tax and Compliance Deadlines: Treasury Consultation, Software Royalties, Payday Super and More
Submit Treasury consultation responses before today’s deadline
Treasury’s consultation on exposure draft legislation for the 2026–27 Budget tax reform measures closes on Monday, 28 September 2026.
The proposals sit within the proposed Treasury Laws Amendment (Tax Reform No. 5) Bill 2026 and cover several important measures for Australian start-ups, investors and businesses conducting research and development.
Innovative Business CGT Concession
The proposed Innovative Business CGT Concession (IBCC) would provide a 50% CGT discount for early investors in eligible innovative Australian start-ups.
However, the draft tests may be difficult for businesses that evolve over time. Industry bodies and advisers have raised concerns about:
- Complex innovative business and predominant activity tests.
- The treatment and valuation of business assets.
- Employee-based tests that may not suit founder-led start-ups.
- Revenue tests that may be difficult for pre-revenue businesses.
- The risk that a start-up could lose eligibility after pivoting or changing strategy.
- Potential issues for founders and early investors where control and affiliate rules apply.
Accounting Times reported concerns about the complexity of the proposed tests, while SmartCompany reported Ai Group’s concerns about start-ups losing the concession after changing direction.
The IBCC remains exposure draft legislation. It is not enacted law. Do not treat the proposed concession as an available tax outcome until legislation is passed and the final rules commence.
R&D Tax Incentive simplification
The consultation package also proposes changes to the R&D Tax Incentive, including:
- Removing eligibility for certain supporting R&D activities.
- Increasing the minimum eligible R&D expenditure threshold.
- Increasing the maximum expenditure threshold.
- Changing offset rates.
- Changing the turnover threshold for the refundable offset.
- Restricting the refundable offset for entities within their first 10 years.
- Extending the relevant period to 15 years for entities conducting R&D connected with therapeutic goods.
These changes could affect Australian technology companies, SaaS businesses, medical technology businesses and other growing companies that rely on R&D tax offsets to support development costs.
Expanded venture capital tax incentives
The proposals would also expand venture capital tax incentives through Venture Capital Limited Partnership (VCLP) and Early Stage Venture Capital Limited Partnership (ESVCLP) structures. The aim is to ensure the eligible investment framework reflects the modern Australian start-up environment.
Action today: If your company, fund or investment structure may be affected, submit comments through the Treasury consultation platform before the end of today.
Keep:
- A copy of your submission.
- The version of the exposure draft you reviewed.
- Supporting calculations and assumptions.
- Evidence of the date and time of submission.
KPMG’s summary of the consultation package provides a useful overview of the proposed IBCC, R&D and venture capital changes.
Review offshore software payments under TR 2026/2
The ATO issued Taxation Ruling TR 2026/2 on 4 September 2026. It replaces outdated 1993 guidance and explains when cross-border payments for software and intellectual property may be treated as royalties.
The practical issue is whether the payment is for the use of, or the right to use, copyright or similar intellectual property rights.
Payments may fall within royalty treatment where an arrangement gives a business rights to:
- Reproduce software.
- Communicate or distribute software in a way involving copyright rights.
- Modify or adapt software.
- Host, integrate or otherwise exploit software beyond ordinary access.
- Authorise others to exercise relevant copyright rights.
New analysis published by Dentons on 28 September 2026 highlights that arrangements involving licence keys and login-gated access may fall within the wider analysis. The label used in a contract, such as “subscription”, “distribution fee” or “royalty-free”, will not decide the tax treatment.
The ruling applies to both new and existing arrangements.
Complete a software payment review
If your Australian company pays an offshore software, SaaS or digital platform provider, review:
- The contract and all schedules.
- Who hosts the software.
- Whether your business can copy, modify, adapt or communicate the software.
- Whether licence keys provide access only or support wider IP rights.
- Whether the payment combines software rights with support, implementation or distribution services.
- Whether Australian withholding tax applies.
- Whether an applicable tax treaty changes the outcome.
- Whether your accounts payable and bookkeeping coding captures any withholding obligation.
The ATO’s software royalty guidance should be reviewed alongside the final ruling.
Australian software and digital businesses invoicing overseas customers should also document what they are supplying. Clear contracts and transaction records will help distinguish software access, services, support and the use of intellectual property.
Skip today’s WA public holiday when counting Payday Super
Today is the King’s Birthday public holiday in Western Australia. Because it is a whole-of-state public holiday, it does not count as an Australian business day for Payday Super purposes.
This applies nationally. Your business does not need to be located in Perth or Western Australia for the holiday to affect the calculation.
Under the ATO’s Payday Super guidance, employers must pay superannuation at the same time as wages, with a limited number of business days allowed for the payment to reach the fund.
Missing a Payday Super deadline can trigger the Superannuation Guarantee Charge, which includes:
- The unpaid superannuation amount.
- Interest.
- An administration fee for each employee.
- Loss of the deduction for the superannuation contribution.
Businesses should recalculate any Payday Super deadline that falls near 28 September 2026, particularly where the deadline falls on or after today. Confirm the correct deadline with your payroll provider and document the calculation you used.
Prepare for the 1 October card surcharge ban
From 1 October 2026, businesses will no longer be permitted to pass on card surcharges to customers for card payments. The change follows the RBA’s review of merchant card payment costs and surcharging.
The ban applies to:
- Debit card payments.
- Credit card payments.
- Prepaid card payments.
- Card payments processed through a mobile wallet or digital wallet.
The ban does not apply to surcharges for other payment methods, such as BPAY, PayPal or cash, unless those surcharges breach existing rules.
Businesses should now:
- Identify which payment methods currently attract a surcharge.
- Determine the cost impact of absorbing card surcharges.
- Update merchant terminals, online checkout and point-of-sale systems.
- Update pricing, signage, invoices, quotes and contract terms.
- Train staff on the change.
- Seek legal or accounting advice on pricing decisions.
Businesses that absorb the surcharge may choose to increase prices or change their cost structure. Any increase should be reviewed against existing pricing and contract arrangements.
Prepare for foreign resident CGT changes from 1 October
From 1 October 2026, changes to the foreign resident capital gains tax rules take effect for CGT events occurring on or after that date.
Key changes include:
- Removing the main residence exemption for foreign residents, subject to transitional rules.
- Introducing a broader principal asset test for indirect interests in Australian real property.
- Extending the non-final withholding and CGT rules to more asset classes.
Foreign residents selling Australian property or holding interests in Australian entities with significant Australian real property should obtain advice before proceeding with a transaction.
The changes may affect:
- The calculation of capital gains and losses.
- Available exemptions.
- Withholding obligations on purchasers.
- The way transactions are structured.
Businesses and individuals with foreign resident owners or investors should confirm whether the changes apply before 1 October 2026.
Key dates to note
| Date | Action |
|---|---|
| Monday, 28 September 2026 | Treasury consultation on the 2026–27 Budget tax reform measures closes. |
| Monday, 28 September 2026 | King’s Birthday public holiday in Western Australia — does not count as a business day for Payday Super. |
| Thursday, 1 October 2026 | Card surcharge ban commences. |
| Thursday, 1 October 2026 | Foreign resident CGT changes take effect. |
| Saturday, 31 October 2026 | Tax lodgment cutoff for relevant entities. |
Businesses and their advisers should confirm each deadline against their own circumstances and the current ATO guidance.
