Global Daily Tax News, ATO Sets Out Changes To 2026 Local File Instructions, (Aug 31, 2026)

The Australian Taxation Office has set out planned updates to the Local File Instructions for 2026.

The upcoming changes announced by the ATO are as follows:

Short form

Short form – Other significant restructures: The changes would confirm that ...

The Australian Taxation Office has set out planned updates to the Local File Instructions for 2026.

The upcoming changes announced by the ATO are as follows:

Short form

Short form – Other significant restructures: The changes would confirm that changes in a taxpayer's related party financing arrangements for the purposes of reporting restructures does not include mere changes in its internally recorded 'dealings' with its own branch operations;
Short form – Connected steps and restructures: The changes would clarify how to report related-party steps occurring in the current reporting year that are connected to steps of a restructure that commenced in a prior year. In particular, clarifying that a taxpayer may answer 'False' at Question 1 if:
- there was a restructure in the previous income year for which the taxpayer reported the required information and details in the prior year local file; and
- no further steps occurred in the current income year which are connected with that prior year restructure.

Local File – Part A

IRPD use rights: The changes would clarify more explicitly that Simplified Transfer Pricing Recording Keeping (STPRK) codes should not be used for transactions involving:
- Rights to use IP (RUIP);
- Other rights to use, supply or receive where consideration is a royalty under subsection 6(1) (ORSR); and
- Licence fees (LF).
Other revenue IRPDs: The changes would clarify more explicitly that reimbursement of costs or recharges should not be reported using the transaction code for 'Other revenue (non-financial dealing) IRPDs' (ORIRPD) if the reimbursement or recharge is for IRPD transactions of a kind covered by a more specific transaction type. The ATO said recharge or reimbursement of costs should be categorized by the nature of what is obtained or provided under the IRPD in exchange for the recharged or reimbursed amounts.
IRPDs involving disposal or acquisition of intangible property or rights of a non-revenue (capital) nature: The changes would clarify more explicitly where to report certain kinds of injections of capital, returns of share capital, and other kinds of disposals of intangible property or rights, including how:
- Injection of capital involving the issue of equity interests other than ordinary shares should be reported using the transaction code for Issue of equity interest other than ordinary shares (IEIOOS);
- The return of share capital which does not result in disposal of shares should be reported using the transaction code for Assignment of other intangible property or rights (ASSOPR).

Streamlined Local File Part B (LFPB) reporting method

The changes would introduce an optional streamlined reporting method to reduce duplication of the same set of LFPB information reported for more than one IRPD transaction. This method will be completely optional. It would allow one set of LFPB reporting data to be treated as reported for more than one IRPD transaction reported in Local file Part A (LFPA) if both of the following conditions are met:
- The Transaction IDs for all relevant LFPA transactions covered by the same LFPB reported data would be reported at either of the following fields in the LFPB:
  - 'Transaction ID' [LCMSF50];
  - and 'Other transaction IDs covered by the agreement' [LCMSF224].
- All information reported in LFPB (including any information about APAs and overseas rulings, where applicable) is identical and correctly reported LFPB data for all the relevant LFPA transactions, the ATO said.
The ATO said examples will be provided in the instructions to explain and illustrate how reporting entities can voluntarily choose to adopt this streamlined LFPB reporting method.

Financial accounts

The changes would clarify more explicitly that all local file lodgments must include the highest quality financial accounts (if they have not already been provided or published by ASIC), including if only a short form local file is required to be lodged. The ATO said financial accounts can be lodged or amended independently of other local file components but are expected to be provided by the CbC lodgment due date for the reporting period.

Local File/Master File 2026 updates

The changes would clarify more explicitly the ATO's expectation that, if a taxpayer chooses to adopt the administrative solution, they must lodge their LFPA at the same time as their income tax return and by the time their income tax return is due.
The changes would clarify more explicitly the requirement for a master file to be lodged by the reporting entity, or on the reporting entity's behalf. Where the reporting entity is not lodging the master file, it must lodge a notification that the master file will be lodged on its behalf by another member of their CbC group (unless a master file exemption is granted).

Global Daily Tax News, ATO Sets Out Changes To 2026 Local File Instructions, (Aug 31, 2026)

The Australian Taxation Office has set out planned updates to the Local File Instructions for 2026.

The upcoming changes announced by the ATO are as follows:

Short form

Short form – Other significant restructures: The changes would confirm that ...

The Australian Taxation Office has set out planned updates to the Local File Instructions for 2026.

The upcoming changes announced by the ATO are as follows:

Short form

Short form – Other significant restructures: The changes would confirm that changes in a taxpayer's related party financing arrangements for the purposes of reporting restructures does not include mere changes in its internally recorded 'dealings' with its own branch operations;
Short form – Connected steps and restructures: The changes would clarify how to report related-party steps occurring in the current reporting year that are connected to steps of a restructure that commenced in a prior year. In particular, clarifying that a taxpayer may answer 'False' at Question 1 if:
- there was a restructure in the previous income year for which the taxpayer reported the required information and details in the prior year local file; and
- no further steps occurred in the current income year which are connected with that prior year restructure.

Local File – Part A

IRPD use rights: The changes would clarify more explicitly that Simplified Transfer Pricing Recording Keeping (STPRK) codes should not be used for transactions involving:
- Rights to use IP (RUIP);
- Other rights to use, supply or receive where consideration is a royalty under subsection 6(1) (ORSR); and
- Licence fees (LF).
Other revenue IRPDs: The changes would clarify more explicitly that reimbursement of costs or recharges should not be reported using the transaction code for 'Other revenue (non-financial dealing) IRPDs' (ORIRPD) if the reimbursement or recharge is for IRPD transactions of a kind covered by a more specific transaction type. The ATO said recharge or reimbursement of costs should be categorized by the nature of what is obtained or provided under the IRPD in exchange for the recharged or reimbursed amounts.
IRPDs involving disposal or acquisition of intangible property or rights of a non-revenue (capital) nature: The changes would clarify more explicitly where to report certain kinds of injections of capital, returns of share capital, and other kinds of disposals of intangible property or rights, including how:
- Injection of capital involving the issue of equity interests other than ordinary shares should be reported using the transaction code for Issue of equity interest other than ordinary shares (IEIOOS);
- The return of share capital which does not result in disposal of shares should be reported using the transaction code for Assignment of other intangible property or rights (ASSOPR).

Streamlined Local File Part B (LFPB) reporting method

The changes would introduce an optional streamlined reporting method to reduce duplication of the same set of LFPB information reported for more than one IRPD transaction. This method will be completely optional. It would allow one set of LFPB reporting data to be treated as reported for more than one IRPD transaction reported in Local file Part A (LFPA) if both of the following conditions are met:
- The Transaction IDs for all relevant LFPA transactions covered by the same LFPB reported data would be reported at either of the following fields in the LFPB:
  - 'Transaction ID' [LCMSF50];
  - and 'Other transaction IDs covered by the agreement' [LCMSF224].
- All information reported in LFPB (including any information about APAs and overseas rulings, where applicable) is identical and correctly reported LFPB data for all the relevant LFPA transactions, the ATO said.
The ATO said examples will be provided in the instructions to explain and illustrate how reporting entities can voluntarily choose to adopt this streamlined LFPB reporting method.

Financial accounts

The changes would clarify more explicitly that all local file lodgments must include the highest quality financial accounts (if they have not already been provided or published by ASIC), including if only a short form local file is required to be lodged. The ATO said financial accounts can be lodged or amended independently of other local file components but are expected to be provided by the CbC lodgment due date for the reporting period.

Local File/Master File 2026 updates

The changes would clarify more explicitly the ATO's expectation that, if a taxpayer chooses to adopt the administrative solution, they must lodge their LFPA at the same time as their income tax return and by the time their income tax return is due.
The changes would clarify more explicitly the requirement for a master file to be lodged by the reporting entity, or on the reporting entity's behalf. Where the reporting entity is not lodging the master file, it must lodge a notification that the master file will be lodged on its behalf by another member of their CbC group (unless a master file exemption is granted).