by Ariful | Sep 13, 2026 | UK Updates
TITLE: Australia Tax Compliance Update: PAYG, BAS, Payday Super and Contractor Rules
1. Review nil PAYG variations before the ATO reviews them
The ATO is contacting taxpayers and tax agents where PAYG instalments have repeatedly been varied to nil across multiple years without clear supporting evidence.
A nil variation can still be legitimate. You may vary your instalment amount or rate to nil when your expected instalment income is genuinely nil or your current forecast supports no instalment liability.
The risk arises when the variation is used to defer tax despite ongoing profits.
Your variation should be based on financial information that is:
- Reasonable, considering your current contracts, trading results and business conditions.
- Current, using up-to-date accounts and forecasts.
- Substantiated, with records that explain how you calculated the expected result.
The ATO’s 85% rule remains important. If your varied instalments are less than 85% of the relevant final tax position, a shortfall of 15% or more can expose you to the General Interest Charge (GIC) and potentially penalties.
For July to September 2026, the official GIC rate is 11.43% per year, compounded daily. It increases to 11.51% per year from 1 October 2026. GIC incurred from 1 July 2025 is also no longer deductible for income tax purposes.
The 2026–27 GDP adjustment factor is 5% for taxpayers using the instalment amount method. This may increase the standard PAYG amount even when your business income has changed.
Complete this PAYG review
- Compare your current instalments with your latest profit and loss report.
- Update your full-year revenue, margin and tax forecast.
- Reconsider any variation to nil.
- Keep working papers, forecasts, bank data and accounting reports supporting the variation.
- Check whether your instalments remain above the 85% benchmark.
- Pay each instalment by its due date.
The ATO PAYG instalment guidance and ATO GIC rates should be part of your compliance review.
Accountants Daily has also reported on the ATO’s warning about repeated nil variations, while Kalkine has highlighted the effect of the 5% GDP adjustment on 2026–27 instalment calculations.
2. Prepare for the 21 September BAS deadline
Monthly reporters must lodge and pay their August 2026 BAS by Monday, 21 September 2026.
This applies to monthly GST reporters, including many larger ecommerce sellers, digital businesses and international businesses registered for Australian GST.
Before lodging, reconcile:
- GST collected on Australian sales.
- GST paid on eligible business expenses.
- Import GST and customs documentation.
- Marketplace settlement reports.
- Payment processor fees.
- Refunds, chargebacks and credit notes.
- Currency conversions for international transactions.
- The GST treatment of cross-border digital supplies.
Do not rely only on your bank feed. Marketplace and payment processor reports may contain timing differences, fees and refunds that affect your BAS figures.
Our VAT automation and compliance systems can help businesses maintain a structured transaction process. Australian GST still requires accurate local treatment and timely BAS reporting.
3. Close the 30 September payroll and trust obligations
Two important obligations fall on 30 September 2026.
Finalise STP for closely held payees
Employers with closely held payees, such as directors, shareholders or family members, generally have until 30 September to submit their Single Touch Payroll finalisation declaration for the 2025–26 financial year.
Check that:
- Salary and wages agree with the general ledger.
- Director payments are correctly classified.
- PAYG withholding amounts reconcile to activity statements.
- Reportable fringe benefits are included where required.
- Superannuation records agree with payroll records.
- Finalisation declarations are submitted for the correct employees.
Lodge the annual TFN withholding report
Trustees that withheld TFN amounts from closely held trust beneficiaries must lodge the 2026 annual TFN withholding report by 30 September 2026.
Quarterly TFN reporting for closely held trusts ceased from 1 July 2026. Beneficiary TFNs are now reported through the annual trust return process.
Review your trust distribution records, beneficiary details and withholding calculations now. Correct records will reduce the risk of mismatches between the trust return, beneficiary reporting and ATO data.
4. Apply the correct super process under Payday Super
A crucial September point is that Payday Super changes how employers manage superannuation.
For employee earnings paid from 1 July 2026, super contributions must generally reach the employee’s fund within 7 business days of each payday. This is now the main payment rule you need to monitor.
The date of 28 October 2026 still matters. It remains the final end-of-quarter deadline for contributions relating to the quarter ending 30 September 2026. However, it is the backstop, not the target. You should not wait until quarter end if the contribution was required earlier under the 7-business-day rule.
If super remains unpaid after 28 October 2026, you must lodge a Superannuation Guarantee Charge statement and pay the SGC by 28 November 2026. The SGC includes the shortfall, nominal interest and an administration component.
This is also an important control point under Payday Super. For periods after 30 June 2026, late contributions paid directly to a fund cannot be used to offset the SGC liability. That means a late payment does not cancel the charge once the obligation has been missed.
Check your Payday Super controls
- Confirm your payroll software is configured for the new payment timetable.
- Reconcile each payday’s super liability to the fund payment confirmation.
- Track failed, rejected or returned contributions.
- Investigate clearing-house delays immediately.
- Keep evidence showing when contributions were paid and received.
- Do not wait until the end of the quarter to identify unpaid super.
The ATO Payday Super guidance provides the current framework.
5. Review contractor arrangements before regulators do
The ATO and Fair Work Ombudsman are intensifying action against sham contracting.
Sham contracting occurs when a business presents an employment relationship as an independent contractor arrangement. This can lead to PAYG withholding liabilities, superannuation guarantee obligations, penalties and back payments.
Businesses should verify that contractor arrangements reflect the true working relationship, including:
- Control over how, when and where work is performed.
- Whether the contractor operates their own business and bears financial risk.
- Whether the contractor can delegate work to others.
- Provision of tools, equipment and insurance.
- Whether the contractor invoices for services and is paid per project or deliverable.
- Whether the contractor is integrated into the business like an employee.
Written contracts alone do not determine the arrangement if the actual working relationship indicates employment.
Our global payroll outsourcing services support compliant payroll and contractor processes across multiple jurisdictions.
Key compliance dates
| Date |
Obligation |
| 21 September 2026 |
Lodge and pay August 2026 BAS (monthly reporters) |
| 30 September 2026 |
STP finalisation declaration for closely held payees (2025–26); lodge 2026 annual TFN withholding report |
| 1 October 2026 |
GIC rate increases to 11.51% per year |
| 28 October 2026 |
End-of-quarter deadline for super contributions for the quarter ending 30 September 2026 |
| 28 November 2026 |
Pay Superannuation Guarantee Charge (SGC) where super remains unpaid after 28 October 2026 |
Take a structured compliance approach
Australia’s tax compliance focus is tightening across PAYG instalments, BAS reporting, payroll and contractor classification.
If you operate an ecommerce business, SaaS company, agency or growing SME in Sydney, Melbourne, Brisbane, Perth, Adelaide or Canberra, use today’s update to check your records before the next deadlines. International businesses operating in Australia should also review their GST, payroll and contractor processes.
Structured record-keeping, current forecasts and proactive reconciliation reduce the risk of ATO scrutiny, GIC exposure and penalties.
by Ariful | Sep 12, 2026 | UAE Updates
TITLE: UAE Tax and Compliance Checklist for September 2026: VAT, Free Zone and Corporate Tax Deadlines
Prepare for UAE VAT changes from 1 October 2026
Cabinet Decision No. 149 of 2026 amends the UAE VAT Executive Regulations. Most changes take effect on 1 October 2026. The revised input tax apportionment rules will apply from the first tax year beginning after 1 October 2027.
Review these areas now.
Reassess bundled products and services
Where a transaction contains multiple economically interconnected components that cannot reasonably be separated, it may be treated as one composite supply. VAT treatment will generally follow the principal component.
This matters if you sell:
- Product and installation packages.
- Subscription bundles.
- Digital services with support or implementation.
- Goods combined with delivery, configuration, or training.
Review your contracts, pricing and invoices. Separately listing components does not automatically make them separate supplies.
Monitor high-value cash payments
Input VAT may be restricted where:
- The supply exceeds a value set by the Minister of Finance; and
- The consideration is paid, or intended to be paid, in cash.
The threshold has not been set in Cabinet Decision No. 149 itself. Monitor further Ministry of Finance guidance and move high-value supplier payments to traceable non-cash methods wherever possible. This will protect potential input VAT recovery and strengthen your audit trail.
Update healthcare and medical product coding
The amendments consolidate pharmaceutical products and medical equipment into the broader category of medical products. Qualifying medical products may continue to receive zero-rating under the relevant Cabinet Decision.
If your digital business supplies healthcare products, software-connected equipment or medical fulfilment services, confirm the applicable product classification before issuing October invoices.
Document employee benefits correctly
The new rules revise input VAT recovery for goods and services provided to employees for personal benefit. They also clarify the treatment of accommodation and benefits connected with labour legislation, employment contracts and FTA-prescribed conditions.
Keep the following records together:
- Employment contracts.
- Written HR policies.
- Accommodation agreements.
- Evidence of any legal or regulatory requirement.
- VAT invoices and payment records.
Good documentation makes your recovery position easier to support.
Change capital asset and credit note procedures
For the Capital Asset Scheme, the definition now focuses on a business asset and its cost. The AED 5 million threshold, VAT requirement and useful-life conditions remain relevant.
Review your fixed asset register and identify assets that may fall within the scheme.
Also update your invoicing system. The words “Tax Credit Note” must be clearly displayed on the credit note itself. They should not appear only in the invoice wording or system description.
Plan for output-based input tax apportionment
Partially exempt businesses will move from the existing input-tax-based standard method to an output-based method. The calculation will generally refer to the value of supplies permitting input tax recovery compared with total supplies, subject to exclusions.
The revised method applies from the first tax year beginning after 1 October 2027. Start modelling the effect now if your business has taxable and exempt activities. This gives you time to improve transaction coding and residual input VAT reporting.
KPMG’s summary of Cabinet Decision No. 149 of 2026 provides further technical detail.
Use Dubai’s free zone mainland-access routes carefully
Dubai Executive Council Resolution No. 11 of 2025 allows eligible free zone establishments to conduct activities outside their free zone and within Dubai, subject to the required DET licence or permit.
Available routes include:
- A branch established within the Emirate.
- A branch operating out of the free zone.
- A temporary permit for specific activities.
A branch operating out of the free zone costs AED 10,000 per year under the Resolution. A temporary permit costs AED 5,000 and may be valid for up to six months.
The framework does not apply to financial establishments licensed in the DIFC.
Your business must also maintain separate financial records for mainland activities and free zone activities. This is particularly important for ecommerce groups selling through multiple channels.
Typical documents include:
- Free zone trade licence.
- Memorandum of Association.
- Passport and Emirates ID of the manager.
- Licensing authority approval.
- Board resolution and power of attorney, where applicable.
- Mainland lease documents, if a physical branch is required.
- Activity-specific approvals.
The original regularisation period began on 3 March 2025 and ran for one year. The Resolution permits a possible one-time extension. If your company was already operating on the Dubai mainland, confirm its current status with DET rather than relying on the original deadline.
Read the official Dubai legislation before applying.
Meet the 30 September Corporate Tax deadline
If your business had a 31 December 2025 year end, your UAE Corporate Tax return and payment are due by 30 September 2026 through EmaraTax.
The deadline applies even if:
- Your Corporate Tax liability is nil.
- You intend to claim Small Business Relief.
- Your business is newly operational.
- You have no tax to pay after deductions or adjustments.
The FTA confirms that businesses must retain supporting records, including transaction records, assets, liabilities and shares held. Records generally need to be retained for at least seven years.
The FTA’s Corporate Tax filing reminder confirms the nine-month filing rule and the 30 September 2026 example.
Check your EmaraTax shareholding disclosures
The 2026 EmaraTax return includes shareholding information covering, where relevant:
- Immediate parent company.
- Ultimate parent company.
- Parent-company tax residency.
- Multinational enterprise group details.
- TIN or TRN information where available.
Prepare an updated ownership chart before filing. Include corporate ownership, related-party relationships and changes during the tax period. If your company is owned directly by individuals, check how the current EmaraTax form re
by Ariful | Sep 12, 2026 | Business
TITLE: ATO Data-Matching Expansion: What Ecommerce Sellers and Employers Must Know
1. Review Amazon and eBay sales before the ATO does
The ATO’s online selling data-matching program is collecting information from platforms including Amazon and eBay.
The program covers the 2023–24, 2024–25 and 2025–26 financial years. The ATO expects to receive data relating to approximately 20,000–30,000 account holders each year where annual sales reach or exceed $12,000.
This threshold is a data-collection trigger. It is not a tax-free allowance.
Check what the ATO can see
Depending on the seller and account type, the information provided may include:
- Name and date of birth.
- Residential or business address.
- Phone number and email address.
- ABN, where applicable.
- Business, store and account names.
- Account identification details.
- Registration date and seller status.
- IP address.
- Monthly and annual transaction counts.
- Monthly and annual sales values.
The ATO matches this information against its own records. It can then identify potential gaps between your online marketplace activity and:
- Income reported in tax returns.
- Sales reported through BAS lodgements.
- GST registration status.
- ABN registration.
- Business activity and lodgement history.
The program is designed to identify unregistered businesses, sellers whose hobby activity has become a business, and businesses that may not be reporting all online sales.
The ATO also states that data may be retained for five years. The stated purpose includes education and voluntary compliance, but mismatched records can still lead to questions, reviews or compliance action.
Complete this seller checklist
If you sell through Amazon, eBay or another online marketplace, complete these checks now:
- Reconcile marketplace payouts to your accounting records.
- Separate gross sales, refunds, fees, shipping and GST.
- Confirm that sales in your tax return agree with platform reports.
- Review whether your business should be registered for GST.
- Check that sales made through multiple platforms are consolidated.
- Keep records for overseas sales, imports and exports.
- Confirm that personal and business marketplace accounts are not being mixed.
- Retain platform statements and payment-provider records.
Do not rely only on the cash received in your bank account. Marketplace payouts may be reduced by refunds, fees, advertising charges or reserves. Your accounting records should explain the full transaction flow.
Read the ATO online selling data-matching program protocol and review the related Federal Register gazette notice.
2. Map travelling workers to tax and super obligations
The ATO has gazetted a new passenger movement data-matching program covering the 2026–27, 2027–28 and 2028–29 financial years.
The notice was issued on 24 August 2026. The program is expected to cover approximately 115,000 individuals per year.
The data comes from the Department of Home Affairs and may include:
- Full name.
- Date of birth.
- Arrival and departure dates.
- Passport information.
- Visa status.
- Residency status.
- Citizenship information.
The ATO will use this information to assess possible tax residency, registration, lodgement, reporting and payment obligations.
This matters to employers with workers who travel to or work in Australia. It may affect global businesses, technology companies, agencies and growing SMEs with employees or contractors visiting Australia from overseas.
Do not rely on a simple day-count test
There is no single number of days that automatically determines whether Superannuation Guarantee obligations apply.
Instead, review the nature of the worker’s presence in Australia:
- Is the visit limited to meetings or a conference?
- Is the worker performing a substantive project?
- Are visits recurring or extended?
- Is the worker paid by an overseas or Australian entity?
- Is the person an employee or a contractor for super purposes?
- Is the work being performed for an Australian business or Australian operations?
- Are payroll, travel and HR records consistent?
Under Payday Super, superannuation contributions must reach the relevant fund within seven business days of payday. This means inbound workers must be identified promptly. Waiting until the end of a quarter may leave too little time to correct payroll records and make payments.
Employers should also understand the potential seriousness of reporting failures. Serious failure-to-lodge penalties can reach up to $910,000 per document, depending on the circumstances.
Build an inbound worker control
Ask your HR, payroll and finance teams to share information about:
- International business travel.
- Temporary Australian assignments.
- Remote work performed from Australia.
- Contractors entering Australia for projects.
- Employees paid through overseas payroll.
- Repeated short visits to Australian offices or customers.
Keep a written assessment for each higher-risk worker. Record why Australian tax, payroll and super obligations do or do not apply.
Review the ATO passenger movements data-matching protocol and the ATO passenger movements data details.
3. Separate contractor labour before calculating super
The ATO has released draft Superannuation Guarantee Determination SGD 2026/D1.
The draft addresses contractors who are treated as employees for super purposes because their contracts are wholly or principally for their labour and skills.
The key point is straightforward: calculate super on the labour component of the contractor’s payment.
Equipment, materials and certain travel or reimbursed costs are generally not part of the labour component. However, if an invoice combines labour and non-labour costs into one amount, you must determine a reasonable labour value.
Identify the correct contractor earnings
The labour component may include:
- The contractor’s core work or service fee.
- Hourly or daily labour charges.
- Overtime.
- On-call or standby allowances.
- Other amounts paid for the person’s own labour an
by Ariful | Sep 12, 2026 | US Updates
TITLE: US Tax Alert: New IRS Foreign Tax Credit Rules, the 15 October Deadline, and Form 5472 Penalties
Review the new foreign tax credit proposals
On 11 September 2026, the IRS and Treasury published proposed regulations under REG-117273-25, listed in the Federal Register as 91 FR 57832.
The proposals address how deductions are allocated and apportioned to:
- Foreign-source section 951A category income for foreign tax credit limitation purposes.
- Deduction eligible income (DEI).
- Foreign-derived deduction eligible income (FDDEI) used in section 250 calculations.
The proposals implement changes introduced by the One Big Beautiful Bill Act (OBBBA) to sections 250(b)(3) and 904(b)(5). They are intended to apply to tax years beginning after 31 December 2025.
Comments are due by 10 November 2026.
Who may be affected?
The proposals are primarily relevant to:
- US corporations with controlled foreign corporations (CFCs).
- Groups calculating section 951A or GILTI-related income.
- Companies claiming or reviewing the FDII deduction.
- International groups allocating interest, research, and experimental costs.
- Businesses claiming foreign tax credits against US tax liabilities.
The proposed approach generally provides special treatment for deductions connected with section 951A category income. For example, interest and certain research and experimental costs are not allocated to that category under the new section 904(b)(5) framework. Other deductions may need to be directly allocable before they can reduce the relevant foreign-source income.
These are proposed rules, not final regulations. However, companies with CFCs or FDII calculations should begin reviewing their accounting data and expense classifications now. Early preparation will make it easier to identify affected calculations before filing.
For background, review the IRS guidance on the foreign tax credit.
Prepare for the 15 October filing deadline
The 15 October 2026 deadline applies to many taxpayers that obtained an extension, including:
- Calendar-year corporations filing Form 1120.
- Individual taxpayers who filed an extension for Form 1040.
- Certain foreign-owned US disregarded entities that extended their information filing using Form 7004.
The deadline does not remove the requirement to keep accurate records. It only gives you additional time to complete and submit the required return or information forms.
Protect your US LLC from Form 5472 penalties
A foreign-owned US disregarded entity, such as a single-member LLC owned by a non-US resident, may need to file:
- A pro forma Form 1120.
- Form 5472 for each relevant reportable transaction and related party.
The IRS treats a foreign-owned US disregarded entity as a corporation for specific reporting purposes under section 6038A. This means that the entity can have a Form 5472 filing obligation even when it does not file a standard corporate income tax return.
According to the IRS Form 5472 instructions, the filing must be submitted by the due date of the pro forma Form 1120, including extensions.
Follow this filing checklist
If your US entity received an extension, complete these steps before 15 October:
- Confirm the entity classification. Check whether the US LLC is foreign-owned and disregarded for US tax purposes.
- Review reportable transactions. Include contributions, distributions, payments, loans, reimbursements, and other transactions with the foreign owner or related parties.
- Prepare a pro forma Form 1120. Write “Foreign-owned U.S. DE” across the top.
- Complete Form 5472. A separate form may be required for each relevant related party.
- Check the filing method. Foreign-owned US disregarded entities cannot e-file Form 5472.
- Mail or fax the documents correctly. Use the dedicated IRS filing address or fax number in the current instructions.
- Keep proof of submission. Retain a copy of every form, attachment, fax confirmation, or postal tracking record.
The IRS instructions identify the dedicated filing options as:
Fax: 855-887-7737
Mail:
Internal Revenue Service
1973 Rulon White Blvd
M/S 6112 Attn: PIN Unit
Ogden, UT 84201
Do not use the standard Form 1120 mailing address for this filing.
Understand the financial exposure
Failure to file a complete and timely Form 5472 can result in an initial $25,000 penalty. If the IRS issues a notice and the failure continues for more than 90 days, an additional $25,000 penalty may apply for each 30-day period, or part of a 30-day period, during which the failure continues.
That is why Form 5472 penalties should be treated as an operational compliance risk, not a document to prepare at the last minute.
Example: a UK seller with a US single-member LLC
Suppose you are a UK ecommerce seller operating through a US single-member LLC. The LLC is owned by you or your UK company, and you filed Form 7004 to extend the filing deadline.
Your action plan is straightforward:
- Prepare the pro forma Form 1120.
- Attach the required Form 5472.
- Write “Foreign-owned U.S. DE” across the top of the relevant documents.
- Mail or fax the package using the dedicated IRS instructions.
- Complete the submission by 15 October 2026.
Failing to complete these steps may expose the LLC to the $25,000 initial penalty, even if the business had little or no US taxable income.
Track the revised GloBE Information Return
Treasury also welcomed the revised GloBE Information Return published on 11 September 2026.
The revised framework is relevant to larger cross-border groups and includes a proposed side-by-side safe harbor for US-headquartered companies. The policy is intended to help qualifying US groups remain subject primarily to US global minimum tax rules rather than facing overlapping Pillar Two administration under the Income Inclusion Rule or Undertaxed Profits Rule.
This does not mean every international seller has a GloBE filing obligation. Smaller ecommerce businesses, digital agencies, SaaS companies, and growing SMEs should first establish whether they fall within the relevant group-size and multinational scope rules.
However, larger groups should monitor the revised return, reporting requirements, and implementation guidance carefully. You can review the latest information through the US Treasury international tax resources.
Build a filing-ready compliance process
Do not wait until the deadline week. Use this short review:
- Confirm every US entity’s classification and filing obligations.
- Identify which returns or information forms are still outstanding.
- Reconcile related-party transactions before preparing Form 5472.
- Diarise the 15 October 2026 deadline and the 10 November 2026 comment date.
- Store copies of all submissions and proof of filing.
by Ariful | Sep 11, 2026 | Business
TITLE: Startup CGT Concession Redesigned, ATO Debt Warning, and Offshore Software Royalties: What Businesses Need to Know
Startup CGT Concession Redesigned, ATO Debt Warning, and Offshore Software Royalties: What Businesses Need to Know
Australia’s tax landscape shifted again today. The proposed Innovative Business CGT Concession is now more generous, the ATO has warned that firmer debt collection is coming, and businesses paying offshore software providers still have time to respond to draft royalty guidance.
This update is relevant to businesses in Sydney, Melbourne, Brisbane, Perth and Adelaide, particularly technology companies, digital businesses, innovative SMEs and international groups.
1. Review the redesigned startup CGT concession before 28 September
The exposure draft removes the proposed $10 million lifetime cap
Treasurer Jim Chalmers released exposure draft legislation for the proposed Innovative Business CGT Concession (IBCC) on 11 September 2026.
The exposure draft changes several settings from the earlier proposal:
- The proposed $10 million lifetime cap on eligible gains has been removed.
- The minimum shareholding period has been reduced from five years to three years.
- The eligible company window has been extended from 10 years to 15 years across all sectors.
- The $50 million turnover threshold remains.
- The requirement to satisfy the innovation criteria also remains.
The concession is intended to protect founders, early employees and investors in qualifying innovative companies from the broader CGT reforms proposed to begin on 1 July 2027.
Under those broader reforms, the current 50% CGT discount would be replaced with cost-base indexation and a 30% minimum tax rate for relevant taxpayers. The IBCC is designed to preserve a targeted 50% discount for qualifying innovative business investments.
The legislation remains a proposal. You should not treat the exposure draft as final law.
Use this checklist to preserve your evidence
If your business or investment may qualify, take these steps now:
- Confirm the company’s age. The proposed 15-year eligibility window applies across all sectors.
- Check turnover. The company must remain below the proposed $50 million threshold.
- Document the innovation criteria. Keep evidence explaining the new or significantly improved product, service, process or method.
- Review share issue records. Confirm when shares or options were issued and who received them.
- Track the three-year holding period. This is shorter than the earlier five-year proposal, but it still requires reliable ownership records.
- Separate eligible and ineligible investments. This will make future CGT calculations and reporting easier.
Treasury is accepting feedback until 28 September 2026 through the official consultation page. The exposure draft is also discussed in reporting from Startup Daily and Capital Brief.
Why this matters: removing the lifetime cap may significantly change the potential benefit for founders and early investors. However, eligibility will depend on the final legislation and the quality of your supporting records.
2. Prepare for the proposed R&D Tax Incentive changes
Align your innovation records with future claims
The same reform package includes proposed changes to the R&D Tax Incentive from 1 July 2028.
The key proposed changes are:
- The refundable support turnover threshold would increase to $50 million.
- The general 10-year access limit would remain.
- Biotech and medtech businesses would receive a proposed 15-year limit.
- The maximum expenditure threshold for the non-refundable offset would increase to $200 million.
These changes could benefit growing technology and digital businesses with substantial development programs. They may also affect how you classify R&D expenditure, document technical activities and reconcile claims to your accounting records.
Maintain a stronger R&D audit trail
Do not wait until the next claim deadline. Maintain:
- Project descriptions and technical objectives.
- Records of experiments, testing and development activities.
- Staff time records.
- Contractor invoices.
- Software and equipment costs.
- Evidence showing how expenditure relates to eligible activities.
- Clear reconciliations between your R&D claim and your general ledger.
For a fast-growing SaaS business in Melbourne, a technology manufacturer in Sydney or a digital product company in Brisbane, consistent records will reduce the risk of unsupported claims.
The proposed R&D settings are not yet final. Monitor the Treasurer’s exposure draft announcement before changing your reporting process.
3. Act now if your business carries ATO debt
Expect more active collection where debt is collectable
ATO Commissioner Rob Heferen has warned that Australia’s tax debt is expected to continue rising in the ATO’s annual report due in October.
The ATO’s total debt book was last reported at approximately $115 billion. The Commissioner said that where debt is collectable, the ATO will continue taking firmer action.
This is an important warning for businesses carrying overdue GST, PAYG withholding, income tax or superannuation-related liabilities.
Correct the September GIC rate before calculating your exposure
The official ATO rates show that the General Interest Charge for July to September 2026 is 11.43% per year, calculated daily.
The rate increases to 11.51% from 1 October 2026.
GIC compounds daily. It continues to increase while an eligible debt remains unpaid. GIC and shortfall interest incurred from 1 July 2025 are also generally no longer tax deductible.
Use the ATO’s official GIC rates and interest guidance when reviewing your account.
Complete this debt review today
- Reconcile every ATO account to your accounting records.
- Identify unpaid activity statements and tax assessments.
- Separate principal debt from GIC and penalties.
- Confirm whether any amounts are disputed.
- Contact the ATO promptly if you need a payment arrangement.
- Update your cash-flow forecast for the 1 October GIC increase.
- Prioritise PAYG withholding and superannuation obligations because these can create serious compliance consequences.
Do not treat ATO debt as ordinary business finance. Daily compounding interest and more active collection can quickly turn a manageable balance into a material cash-flow problem.
