Global Daily Tax News, Australia Outlines New Tax Year Enforcement Focus Areas, (Sep 23, 2025)

The Australian Taxation Office has set out specific areas of focus regarding oversight of privately owned and wealthy groups in 2025-26.

Generally, the ATO has said it will seek to identify taxpayers who have failed to register, or who have registered under the incorrect basis; have failed to file the correct returns, including fringe benefits tax (FBT) returns or taxable payments annual reports when required; and those who have not settled their tax liabilities or engaged with the agency on time.

In relation to reporting, the agency said the following issues will receive the agency's focus:

• incomplete reporting of returns, activity statements and schedules (including information labels such as shareholder loans, assets, and liabilities);

• omitted income, sales, or fringe benefits; and

• incorrectly claimed GST credits, fuel tax credits, and research and development (R&D) tax incentive.

In relation to Division 7A, which applies to certain payments, loans, and debt forgiveness made by trustees to a shareholder or an associate of a shareholder of a private company, the agency intends to focus oversight on:

• inadequate record keeping;

• unreported shareholder loans;

• non-complying loan agreements;

• failing to make minimum yearly repayments (including not applying the correct benchmark interest rate);

• arrangements where minimum yearly repayments are made either from another loan or a subsequent reborrowing from the same company; and

• arrangements to circumvent Division 7A through the guaranteeing by private companies of third-party loans.

Meanwhile, in the area of capital gains tax, the ATO has said it is focused on reducing instances of taxpayers claiming concessions without considering and meeting the eligibility requirements; and engaging with those restructuring in order to access the concessions.

The CGT risks and issues the agency is said to be focused on include:

• inappropriately applying the CGT discount;

• claiming small business CGT concessions without eligibility requirements being met;

• misusing the small business restructure rollover;

• restructuring to access concessions taxpayers otherwise wouldn't have been eligible for;

• trusts inappropriately applying Division 855 of the Income Tax Assessment Act 1997 to disregard capital gains for foreign beneficiaries.

This year's guidance features a focus on trusts and on succession planning, and the agency has also highlighted concerns regarding items being mischaracterized as being used in a business activity, when the goods are instead used for a private pursuit or "hobby-like activity".

Further, the guidance lists the following industries and activities as areas of focus:

• Tax advisers and professional firms;

• Property and construction;

• Private equity;

• Retail;

• Crypto assets;

• Use of tax-exempt or concessionally taxed entities;

• Retirement villages; and

• GST refund fraud.