Daily Australia Tax Update: 30 September 2026, CGT Concession Threshold Lifted to $10m, ATO Crypto Audit Guidance Imminent & Card Surcharge Ban Starts Tomorrow

by Ariful | Sep 30, 2026 | Australia Updates

TITLE: Australian Business and Tax Update: CGT Threshold, Crypto Audits, ATO Tip-Offs and the Card Surcharge Ban

Prepare for the small business CGT threshold to rise to $10 million

The federal government has announced that the aggregated turnover threshold for the small business 50% active asset reduction will increase from $2 million to $10 million.

The change is expected to apply from 1 July 2027. It follows business criticism of proposed capital gains tax reforms and forms part of a wider package covering small businesses, startup investors and trusts.

The important point is that the $10 million threshold does not automatically apply to every small business CGT concession.

The government’s small business explainer confirms that:

• The 50% active asset reduction threshold will increase to $10 million.
• The 15-year exemption, retirement exemption and small business rollover continue to have their existing eligibility requirements.
• Businesses must still satisfy the active asset test and other conditions.
• Aggregated turnover includes the relevant connected entities and affiliates, not just the turnover of one company.

This could benefit private groups, digital businesses and growing ecommerce companies with turnover between $2 million and $10 million. However, the concession is not automatic. You will need accurate group-wide financial records and supporting evidence for the asset disposal.

The wider reforms are also expected to replace the general 50% CGT discount with an inflation-linked approach and a 30% minimum tax rate on real gains from 1 July 2027. That makes transaction records and year-end accounts especially important.

Review your structure before a future asset sale

If you may sell a business, website, software platform, brand or other active business asset, start organising the evidence now.

Maintain:

• Group turnover calculations.
• Ownership and connected-entity records.
• Asset acquisition and improvement costs.
• Evidence showing how the asset was used in the business.
• Board, shareholder or trustee records supporting the transaction.

Doing this early will make it easier to test eligibility when the new rules take effect.

Startup investors and testamentary trusts also feature in the reforms

The announcement also includes changes affecting investors in innovative Australian startups and certain testamentary or discretionary trusts.

The proposed startup investor concession is separate from the small business CGT threshold. Current reported changes include:

• Extending the maximum age of an eligible startup company from 10 to 15 years.
• Reducing the minimum shareholding period from five years to three years.
• Removing an earlier proposed $10 million cap on the amount of the investor concession.

These measures remain subject to detailed eligibility rules and implementation requirements. Founders and investors should retain complete share subscription, ownership and holding-period records.

Trust changes also require attention. The government’s Treasury material confirms that the four small business CGT concessions remain available where the relevant conditions are met. However, changes to the taxation of discretionary trusts may affect how capital gains are taxed and distributed.

Keep trust accounting, beneficiary records and company accounts up to date. This will reduce the risk of incorrect reporting when the rules change.

Expect tighter evidence requirements for SMSF crypto audits

The ATO is finalising new guidance for SMSF auditors on digital assets and cryptocurrency. The guidance is expected in the next few months, and a draft has already been circulated to an audit stakeholder group, according to SMS Magazine’s ATO coverage.

ATO SMSF Regulatory Branch director Kellie Grant said auditors must independently verify digital asset holdings. They should not rely solely on:

• Exchange holding statements.
• Client-prepared spreadsheets.
• Unverified screenshots.
• Unsupported wallet declarations.

Auditors are expected to use public blockchain data to verify wallet balances and sample transactions. They must also establish that the wallet is controlled by, and properly connected to, the SMSF.

Where sufficient evidence cannot be obtained, the auditor may need to modify the audit opinion and lodge an Auditor Contravention Report.

Build an audit-ready crypto evidence file

If your SMSF or business holds crypto assets, maintain a complete evidence trail covering:

1. Wallet addresses and control evidence.
2. Exchange statements and transaction exports.
3. Blockchain transaction histories.
4. Valuation evidence at the relevant reporting date.
5. Records showing the asset is held separately from personal assets.
6. The investment strategy and trust deed requirements.
7. Purchases, disposals, swaps, staking income and other taxable events.

This matters beyond SMSFs. Australian ecommerce and digital businesses increasingly receive, hold or convert digital assets. Crypto transactions must be reconciled to accounting records and assessed for income tax, GST and capital gains treatment where relevant.

ATO tip-offs are increasing across Australia

The ATO received more than 52,000 community reports during 2025–26, equal to approximately 1,000 reports each week. Reports were around 11% higher than two years earlier, and approximately 83% were considered suitable for further review.

According to reporting by SmartCompany and the ATO’s shadow economy release, the most reported industries included:

• Building and construction.
• Cafés and restaurants.
• Hairdressing and beauty services.

The ATO says community information is an important intelligence source. This follows Operation Tonberry, during which ATO officers conducted more than 25 surprise visits to fast-food outlets, restaurants and cafés in Melbourne CBD on 22 and 23 September.

The activity focused on suspected under-reporting, cash-in-hand payments, unpaid superannuation and poor record keeping.

The message applies nationally. Businesses in Melbourne, Sydney, Perth, Western Australia and Queensland should ensure their sales, payroll and supplier records reconcile consistently.

Keep your records accurate every day. Strong bookkeeping makes it easier to respond to ATO questions and identify errors before they become compliance problems.

Remove card surcharges from 1 October

The card surcharge ban begins tomorrow, 1 October 2026.

The Reserve Bank of Australia’s official FAQ confirms that eftpos, Mastercard and Visa will introduce no-surcharge rules for credit, debit and prepaid card payments. American Express, UnionPay and PayPal have also announced changes, although PayPal’s rul

Daily Australia Tax Update: 29 September 2026. Card Surcharge Ban Starts Thursday, ATO Software Royalty Ruling Bites & 31 October Lodgment Warning

by Ariful | Sep 29, 2026 | Australia Updates

Your compliance priorities for the week ahead

Australian businesses have three immediate compliance priorities this week: remove card surcharges before Thursday, review offshore software payments under the ATO’s final royalty ruling, and prepare for key 31 October lodgment obligations.

The ATO is also increasing its use of data, tip-offs and targeted visits. Accurate bookkeeping and complete records are now essential for Australian e-commerce sellers, digital businesses and growing SMEs.

Remove card surcharges before 1 October

From Thursday, 1 October 2026, Australian businesses can no longer apply card payment surcharges to payments made using:

• eftpos
• Mastercard
• Visa

The change applies to credit, debit and prepaid cards. It covers both Australian-issued and internationally issued cards, as well as online and in-person transactions.

American Express and UnionPay are also voluntarily removing surcharges. PayPal is voluntarily removing its surcharge arrangements as well.

The Reserve Bank of Australia’s implementation guidance confirms that the surcharge changes take effect on 1 October. The RBA is also reducing the interchange cap for domestic-issued consumer credit cards from 0.8% to 0.3% of the transaction value.

The domestic debit and prepaid card cap will also reduce to 8 cents per transaction and 0.16% of transaction value. These changes should reduce some wholesale payment costs for merchants, although your actual merchant service fees will depend on your payment provider and pricing plan.

Complete this payment compliance checklist

Do not wait for Thursday. Complete these checks now:

1. Remove surcharge settings from your point-of-sale system.
   This prevents non-compliant fees from being added to in-store transactions.

2. Review Shopify, WooCommerce and other checkout settings.
   Online sellers must remove card surcharges from checkout pages, payment rules and automated customer emails.

3. Check Amazon, marketplace and payment gateway arrangements.
   Confirm whether surcharges are controlled by your payment gateway, marketplace integration or merchant account. This reduces the risk of a fee continuing after the legal change.

4. Review contracts with payment providers.
   Check how merchant service fees, gateway charges, refund fees and chargeback costs will be treated after 1 October.

5. Update customer-facing prices.
   If you previously recovered payment costs through a separate surcharge, decide whether those costs need to be reflected in your standard pricing. Do not describe a card-specific fee as a general service fee.

6. Update your bookkeeping.
   Stop recording card surcharge income from 1 October. Continue recording merchant fees and payment processing charges as business expenses, subject to the normal deductibility rules.

Keeping your accounting system aligned with your checkout system will help you reconcile sales, GST and payment settlements accurately.

Review offshore software and SaaS payments

The ATO has finalised Taxation Ruling TR 2026/2, which explains when payments under software and intellectual property arrangements may be treated as royalties.

The ruling is particularly important for Australian digital businesses that pay overseas suppliers for:

• SaaS platforms
• cloud software
• software licences
• white-label technology
• software distribution rights
• access to offshore intellectual property
• related-party technology services

If a payment is a royalty, Australian withholding tax may apply. The relevant treatment depends on the legal rights granted, how the software is used, the payment flow and any applicable tax treaty.

The ATO’s draft Practical Compliance Guideline PCG 2026/D4 sets out proposed risk zones for cross-border software payments. It is not law, but it indicates the types of arrangements likely to attract ATO attention.

Check your software payment structure

Review each offshore software arrangement and document:

• Who owns the software and intellectual property?
• Does your business receive a right to use, reproduce, distribute or commercialise the software?
• Are you paying for a service, infrastructure or access to intellectual property?
• Are you reselling or facilitating access to the software for Australian customers?
• Is the supplier a related company?
• Is part of the payment passed to an offshore software owner?
• Does a tax treaty affect the withholding outcome?
• Were withholding tax obligations considered when payments were made?

A simple subscription used internally by your Australian business may require a different analysis from a reseller or white-label arrangement. The contract wording alone may not determine the outcome. The commercial substance and rights provided are important.

Do not assume that calling a payment a “SaaS fee” removes withholding obligations. If your business has paid offshore software suppliers throughout 2025–26, organise the contracts, invoices, payment records and supplier details now. This will make the compliance position easier to establish and support your records if the ATO asks questions.

Prepare for the 31 October lodgment deadline

The 31 October deadline is approaching for several Australian tax obligations.

For individuals and many small businesses lodging directly, 2025–26 income tax returns are generally due on 31 October 2026. Because 31 October falls on a Saturday, the practical due date may move to the next business day under the ATO’s weekend rule. Confirm the applicable date for your return and lodging method.

If you use a registered tax agent, you may qualify for a later date under the tax agent lodgment program. However, you generally need to engage the agent and be included on the relevant client list within the required timeframe. Outstanding prior-year returns can also bring a return back to a 31 October deadline.

The ATO’s October 2026 registered agent lodgment guidance should be checked for your specific obligation.

Reports that may also be due

Review whether your business needs to lodge PAYG withholding annual reports for:

• payments where an ABN was not quoted
• interest, dividend and royalty payments to non-residents
• specified payments to foreign residents

The ATO explains these annual reporting obligations in its PAYG withholding annual reporting guidance.

Before lodging, reconcile:

• payroll records
• PAYG withholding amounts
• contractor payments
• non-resident payments
• royalty payments
• bank transac