TITLE: September 2026 Tax Compliance Update: Trust Elections, ATO Debt Recovery, and Payday Super
Australia’s tax compliance agenda is moving quickly this September.
Treasury has released detailed exposure draft legislation for the proposed 30% minimum tax on certain discretionary trusts. The ATO is also increasing pressure on unpaid tax debt, while employers must now operate under the new Payday Super rules.
This update covers the key developments affecting businesses, trustees and employers across Sydney, Melbourne, Brisbane, Perth, Adelaide and Canberra.
Review the trust tax election before the 18 September deadline
Treasury released the exposure draft legislation on 3 September 2026. The consultation closes on 18 September 2026.
The proposed 30% minimum tax would apply to certain discretionary trusts from 1 July 2028. Treasury has also published the draft electable regime, giving trustees more detail about how an Excluded Election Trust (EET) may operate.
Read the Treasury consultation materials and the official ministerial announcement.
Understand how the EET election works
The draft legislation allows an eligible trustee to make an EET election and nominate beneficiaries with fixed percentage entitlements to both:
- Trust income.
- Trust capital.
The nominated percentages must generally total 100%. The income and capital percentages must also correspond.
This means you cannot treat the election as a broad intention to distribute income. You would need to operate the trust consistently with the formal nomination.
The election is available to a trust in existence on 1 July 2028. The election and nomination must generally be notified to the Commissioner by the earlier of:
- The due date for lodging the trust’s return for the relevant year.
- The date the return is actually lodged.
The practical deadline will usually fall in the 2028–29 income year.
Do not treat the election as completely irreversible
The draft allows only one EET election for a trust. A previous election that has been revoked cannot simply be made again.
However, the legislation also contains future-year revocation mechanics. A trustee may revoke the election for future years by giving notice within the required timeframe.
The election can also be automatically revoked if the trustee does not follow the nominated allocations. If that occurs, the trust may again be treated as a minimum tax trust. Present entitlements for the relevant year may also be disregarded, leaving the trustee exposed to tax under the proposed rules.
Some limited variation rules are proposed. These include certain situations involving:
- The death of a nominated individual.
- Relationship breakdown orders, agreements or awards.
- Changes affecting an eligible company beneficiary.
You should not assume that a commercial distribution decision can be changed later without consequences.
Check the trust deed and distribution process now
Before considering an EET election, complete this checklist:
- Review the trust deed. Confirm that the trustee has the power to make the proposed distributions and nominations.
- Map the beneficiaries. Identify who can legally benefit under the deed on 1 July 2028.
- Test the percentages. Ensure income and capital allocations can be applied consistently.
- Review corporate beneficiaries. Check whether each company meets the proposed eligible company requirements.
- Document governance controls. Your accounting and distribution workflow must prevent accidental deviations.
- Consider a private binding ruling where appropriate. This may help address uncertainty about how the rules apply to a specific trust.
The proposed fixed trust definition is also important. Treasury is seeking to replace the existing ITAA 1936 concept with a definition focused on whether there are material discretionary elements. Certain commercial trust structures may fall outside the minimum tax where beneficiaries have clear and enforceable rights.
Compare election and restructuring options
The EET election is intended to provide an alternative to restructuring. It may avoid some resettlement and state stamp duty concerns because the trust does not need to transfer its assets to a new entity.
The draft also proposes expanded CGT rollover relief for taxpayers who restructure. The relief is intended to operate for three years from 1 July 2027, effectively allowing eligible transfers by 30 June 2030. A four-year clawback or integrity period should be reviewed carefully before any transfer is implemented.
Other issues remain relevant, including:
- Possible double taxation involving corporate beneficiaries where no election is made.
- The operation of trust-to-trust offsets.
- Resettlement risks.
- State and territory stamp duty.
- The interaction between trust distributions, company tax and franking credits.
Do not wait for the final law before organising your records. The exposure draft may change, but the review process is already valuable.
Meet the September 2026 compliance dates
The following deadlines should be added to your Australian compliance calendar.
21 September 2026: August monthly activity statements
Businesses reporting monthly must lodge and pay their August 2026 activity statement by 21 September 2026.
Check your:
- GST sales and purchases.
- PAYG withholding.
- PAYG instalments.
- Payroll records.
- Bank and payment-platform reconciliations.
Complete your bookkeeping before the deadline. This gives you time to correct missing invoices, marketplace data and payroll adjustments.
30 September 2026: Pillar Two returns
Certain multinational enterprise groups with a 31 March 2025 fiscal year-end must lodge their:
- GloBE Information Return.
- Domestic Minimum Tax Return.
These Pillar Two obligations require coordinated group data. Confirm whether your group is within scope and whether another group entity is responsible for lodging.
30 September 2026: payroll and trust reports
Several other reports may also be due on 30 September:
- PAYG withholding payment summary annual report for eligible small withholders using a tax agent.
- STP finalisation for closely held payees where the employer also has arm’s-length employees.
- Annual TFN withholding report for closely held trusts.
Review each obligation separately. A business may have one, several or none of these reporting requirements.
Respond early to the ATO’s $115 billion debt push
The ATO Commissioner has confirmed that the ATO’s tax debt book has reached approximately $115 billion. The ATO is focusing more heavily on taxpayers who do not engage.
Potential enforcement action includes:
- Director Penalty Notices.
- Garnishee notices.
- External debt collection.
- Disclosure of eligible business tax debts to credit reporting bureaus.
- Legal recovery action.
The ATO has indicated that business tax debts above relevant thresholds may be disclosed where there is no meaningful engage
