TITLE: Australia Tax Update: GST Fraud Sentences, TPAR Deadlines, and SMSF Borrowing Changes
Australia’s tax compliance environment continues to tighten. This update covers recent GST fraud sentencings, the 28 August TPAR deadline, new SMSF borrowing restrictions, and practical BAS controls for Australian businesses and international sellers.
Understand the consequences of false BAS claims
The ATO has reported that four more individuals linked to Operation Protego have been sentenced for their involvement in fraudulent GST refund schemes.
Operation Protego targets schemes where people lodge false Business Activity Statements to claim GST refunds for businesses that do not genuinely trade. Some cases involve fictitious businesses, false invoices, or BAS lodgments made without real commercial activity.
The consequences can include:
- Imprisonment.
- A permanent criminal record.
- Repayment of fraudulent GST refunds.
- Recovery action for outstanding tax debts.
- Additional penalties and interest.
- Wider investigation of connected businesses and participants.
Recent ATO cases show that prison sentences can extend to several years. Individuals have been prosecuted for submitting false BAS, obtaining financial advantages by deception, and dealing with the proceeds of indictable crime.
The ATO’s message is direct: if you do not operate a business, do not obtain an ABN and do not lodge a BAS.
Acting Deputy Commissioner Pennie Snowden has emphasised that GST fraud is not a harmless shortcut. The ATO works with the Serious Financial Crime Taskforce (SFCT), the Australian Federal Police and other agencies to identify, investigate and prosecute serious tax crime.
Read the ATO’s Operation Protego information and its latest GST fraud sentencing update.
Protect your business from risky GST schemes
Do not participate in arrangements that promise easy GST refunds or unusually large tax credits. You remain responsible for the accuracy of your BAS, even if another person prepares or lodges it for you.
Before claiming GST credits, check that:
- The purchase was made for your business.
- The supplier genuinely provided the goods or services.
- You hold a valid tax invoice where required.
- The GST amount is correctly calculated.
- The transaction is recorded in your accounting system.
- The claim is supported by bank and supplier records.
A refund is not evidence that a claim is correct. The ATO can review or amend earlier BAS periods and recover amounts that were incorrectly claimed.
Wait until after 28 August for complete TPAR pre-fill
Contractors should consider waiting until after 28 August 2026 before lodging their individual tax returns.
Businesses that pay contractors in certain industries must lodge a Taxable Payments Annual Report (TPAR) by 28 August each year. The ATO then uses this information to pre-fill contractor income into individual tax returns.
Waiting can help you:
- Capture more complete contractor income data.
- Reduce the risk of omitted income.
- Avoid unnecessary amendments.
- Prevent a refund from being recalculated later.
- Save time comparing your records with payer information.
The recommendation is particularly relevant to contractors in industries such as:
- Building and construction.
- Cleaning.
- Courier services.
- Road freight.
- Information technology.
- Security and other specified industries.
This is not a mandatory waiting period. You can lodge earlier if necessary. However, you should not rely solely on incomplete pre-fill data.
If you lodge before 28 August, complete this checklist first:
-
Gather all invoices and payment records.
This helps you report your full assessable income even if payer data has not appeared. -
Review bank statements and payment platforms.
This helps identify deposits that may not yet be shown in your pre-filled return. -
Compare your records with available ATO data.
This helps you identify possible differences before lodgment. -
Include contractor income manually where required.
This reduces the risk of an understated return. -
Check your pre-fill again before finalising.
This helps prevent duplicated or omitted income.
The ATO’s 2026 pre-fill guidance explains when TPAR data is expected to become available. You can also use the ATO’s pre-fill availability service.
Review new SMSF borrowing rules from 10 August
New SMSF rules apply from 10 August 2026 to limited recourse borrowing arrangements (LRBAs) used to acquire real property.
The key change is targeted. A new LRBA entered into from 10 August 2026 to acquire real property must generally acquire business real property. This means ordinary residential property that is mainly used for private or domestic purposes cannot generally be acquired using a new LRBA from that date.
This does not mean that every SMSF LRBA has been abolished.
Subject to the usual superannuation rules, SMSFs may still be able to:
- Continue an existing residential property LRBA entered into before 10 August 2026.
- Refinance an existing qualifying LRBA.
- Acquire residential property using cash or non-LRBA funding.
- Complete a purchase covered by a binding contract exchanged before 10 August 2026.
- Use a new LRBA to acquire qualifying business real property.
Business real property must generally be used wholly and exclusively in one or more businesses. Commercial premises used by a business may qualify. Some primary production land may also qualify, subject to specific conditions.
Review your SMSF structure immediately if you have:
- An existing LRBA.
- A proposed residential property purchase.
- A contract exchanged before 10 August 2026.
- A refinancing arrangement.
- Related-party lending or property ownership structures.
- A commercial property acquisition under consideration.
Keep the relevant loan agreements, trust documents, property contracts, settlement records and valuation evidence together. This will help demonstrate when the arrangement was entered into and whether transitional rules apply.
Read the ATO’s guidance on changes to limited recourse borrowing arrangements.
Strengthen your BAS process before the next lodgment
Australian SMEs, digital businesses and ecommerce sellers should
