TITLE: ATO Prosecutions Up 80%, TPB Sanctions Expand, Trust Tax Consultation Closes: What Australian Businesses Must Do Now
ATO prosecutions rise 80% as non-lodgment attracts criminal consequences
The ATO has reported an 80% increase in successful shadow economy non-lodgment prosecutions over the past two years.
More than 350 individuals and businesses have been successfully prosecuted. The ATO also secured more than 305 convictions, with convictions rising by almost 60% year on year. Courts imposed more than $2.7 million in fines.
The ATO estimates that the shadow economy may represent up to 5.4% of Australia’s GDP. Assistant Commissioner Tony Goding has warned that deliberate non-lodgment can result in:
- Criminal convictions.
- Financial penalties.
- Damage to business reputation.
- Loss of customer and marketplace trust.
- In serious cases, the closure of a business.
The figures are particularly relevant for ecommerce brands, digital agencies, SaaS businesses and fast-growing SMEs. Revenue may flow through Shopify, Amazon, eBay, Stripe, PayPal or other platforms, but the business remains responsible for maintaining complete records and lodging its required returns.
Queensland, Western Australia and New South Wales lead prosecution figures
During 2025–26, the state distribution of successful non-lodgment prosecutions was reported as:
- Queensland: 28%.
- Western Australia: 26%.
- New South Wales: 20%.
- Victoria: 17%.
- South Australia: 7%.
- Northern Territory: 2%.
- Australian Capital Territory: 1%.
This means businesses in Brisbane, Perth and Sydney should take particular care when reviewing overdue lodgments. However, the risk applies nationwide, including businesses operating from Melbourne, Adelaide and Canberra.
Act now: check whether every required tax return, BAS, PAYG report and annual obligation has been lodged. If something is missing, organise the records and address the outstanding obligation promptly. Doing this can reduce the risk of escalating ATO action and prevent a missed filing from becoming a wider compliance problem.
Review your tax agent before stronger TPB sanctions take effect
The Tax Practitioners Board is introducing a broader sanctions toolkit for tax adviser misconduct. The measures include:
- Criminal penalties for certain unregistered entities and unregistered tax return preparers.
- New civil penalties for breaches of the Code of Professional Conduct.
- Higher maximum civil penalties.
- Infringement notices.
- Enforceable undertakings.
- Interim suspension powers.
- Contingent suspension powers.
- Greater transparency around practitioner sanctions.
These changes matter to business owners because your tax agent or BAS agent may handle sensitive financial information, lodgments and communications with the ATO.
Verify registration before sharing business records
Before you appoint or continue working with an accountant, tax agent or BAS agent:
- Search the TPB Register.
- Confirm that the individual or entity is registered for the services they provide.
- Check whether the registration details match the person or business you are dealing with.
- Review engagement terms and responsibility for records, approvals and lodgment deadlines.
- Keep copies of submitted returns and confirmation receipts.
The enhanced sanctions regime applies from 1 October 2026 following passage of the Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026, and the TPB has confirmed it will publish further practitioner guidance in the coming months.
Confirm your agent’s registration and engagement terms now.
Trust tax consultation closes on 18 September
Treasury is consulting on exposure draft legislation proposing a 30% minimum tax on certain discretionary trust distributions.
The proposed measure is intended to apply from 1 July 2028. It is not yet law. However, the current consultation on the exposure draft closes tomorrow, 18 September 2026.
If your ecommerce brand, digital business or SME operates through a discretionary trust, review the exposure draft and assess whether the proposed rules may affect:
- Distribution decisions.
- Beneficiary taxation.
- Trust accounting records.
- Group structures.
- Cash-flow planning.
- The timing and documentation of distributions.
If you want to provide feedback, lodge a submission through the Treasury Consultation Hub before the closing time.
Do not treat the proposal as an immediate tax liability. It remains a consultation measure. However, reviewing the exposure draft now gives you time to identify data gaps and understand which trust records may be needed if the legislation proceeds.
The ATO’s overview of the proposal is also available on its page about introducing a minimum tax on discretionary trusts.
Prepare for the 21 September BAS and PAYG deadline
The next immediate compliance date is 21 September 2026.
For businesses with monthly reporting obligations, this date covers:
- The August 2026 monthly BAS.
- Any August 2026 monthly PAYG instalment reported monthly.
- Payment of the amounts shown as payable.
The deadline is especially important for businesses with high transaction volumes. Online stores and digital businesses should reconcile payment gateways, marketplace settlements, refunds, shipping income, platform fees and foreign currency transactions before finalising the BAS.
Do not confuse this date with the quarterly PAYG instalment deadline. Businesses on quarterly PAYG instalments generally have a different due date, and your activity statement or instalment notice will confirm the amount and deadline that applies to you.
Use the ATO’s September 2026 key dates and PAYG instalment guidance to verify your obligations.
Complete this Australia tax compliance checklist today
Use this checklist before the next deadline:
- Confirm that all required income tax returns and BAS lodgments are up to date.
- Reconcile ecommerce marketplaces, payment processors and business bank accounts.
- Check GST treatment for domestic and international sales.
- Review refunds, chargebacks, gift ca
