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ATO clarifies how anti-avoidance rules apply to personal services businesses
The Australian Taxation Office (ATO) has issued a new compliance guideline, PCG 2024/D2, dealing with the application of the general anti-avoidance provisions in Part IVA of the Income Tax Assessment Act 1936 to income derived through a personal services business (PSB).
The guideline addresses situations where an individual provides personal services via an interposed personal services entity (PSE), such as a trust or company. Even where the entity passes the tests to qualify as a PSB (i.e. not subject to the personal services income, PSI, attribution rules), the ATO confirms that Part IVA may still apply if the arrangement involves alienation of personal services income (PSI) for the purpose of obtaining a tax benefit, for example through income-splitting with others or retention of profits in the PSE.
The guideline establishes a two-part risk assessment framework. Arrangements are categorised as “low-risk” or “higher-risk” based on a series of indicia. Low-risk arrangements are those where net PSI is distributed to the individual whose effort generated it and is taxed at their marginal rate. Higher-risk arrangements include income-splitting to associates, retention of profits without a clear commercial purpose, or remuneration paid to associates that is not commensurate with the services performed.
Structuring personal services through a company or trust does not eliminate the risk of anti-avoidance scrutiny.
Even if a PSE qualifies as a PSB, advisers should carefully assess whether profit-retention or income-splitting features of the structure might attract Part IVA. Robust documentation, clear commercial rationale, and proper distribution of PSI to the service-provider are essential to mitigate this risk.
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PCG 2025/5 | Legal database
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Victoria finalises key ruling on economic entitlements and land transfer duty
The State Revenue Office of Victoria has finalised Revenue Ruling DA-067, providing comprehensive guidance on how land transfer duty applies to economic entitlements in land.
The ruling clarifies key concepts and interpretations under Pt 4B of Ch 2 of the Duties Act 2000 (Vic) (Act), which captures arrangements where a person obtains the economic benefits of land without acquiring a legal or beneficial ownership interest.
These provisions are designed to ensure duty applies where an arrangement is economically equivalent to ownership, even if no dutiable transfer occurs.
Revenue Ruling DA-067 covers:
- the meaning of an arrangement under the economic entitlement rules;
- transitional relief for arrangements entered before 19 June 2019;
- land nexus and aggregate unencumbered value;
- the timing and nature of economic entitlements
acquisition of entitlements through another person;
- participation in economic benefits from land;
- acquisitions of shares and units; and
- foreign purchaser additional duty.
In relation to share and unit acquisitions, the ruling confirms that the economic entitlement provisions do not apply where a person acquires securities that provide only general dividend or income rights determined by reference to the landholder’s assets as a whole. This applies even where the landholder’s sole asset is a single parcel of land. Such transactions are instead dealt with under the landholder provisions in Pt 2 of Ch 3 of the Act.
By contrast, the economic entitlement provisions can apply where a governing document or binding instrument provides a legally enforceable right to share in economic benefits from specific land. This applies even if payment, timing, or calculation is contingent on a future event. This is distinct from the ordinary rights of shareholders or unitholders.
Revenue Ruling DA-067 should be read in conjunction with Revenue Rulings DA-065 and DA-066, issued in June 2025, which provide further guidance on service-fee arrangements and the calculation of economic entitlements. The ruling takes effect from 26 November 2025 and finalises draft ruling DA-067.
The ruling reinforces that duty can apply even in the absence of a transfer of ownership. Any arrangement that confers participation in the economic benefits of specific land should be reviewed carefully for potential duty implications.
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Land transfer duty - Economic entitlements in relation to land - Key concepts and interpretation | State Revenue Office
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ATO report reveals tax-assurance gaps in Australia’s biggest private groups
The ATO has published its 2025 “Top 500 Tax Performance Program, Findings Report,” covering the 2023–24 financial year, offering fresh insight into the tax compliance, governance, and risk-areas within Australia’s largest privately owned and wealthy groups.
Key findings include:
- the ATO “tax-assured” A$1.646billion of income tax from Top 500 entities, meaning the ATO has high confidence those amounts were correctly reported;
- however, the ATO raised A$552.5million in additional income tax liabilities; of this A$41.3million arose from voluntary disclosures. Many of these liabilities stemmed from basic errors or from groups lacking documented tax governance; and
- the report underscores that inadequate record-keeping and weak tax governance remain common among groups reviewed.
Even large, sophisticated private groups remain vulnerable to compliance gaps. Effective tax governance, robust record-keeping, and proper documentation are critical.
Advisers should prioritise governance frameworks and periodic internal reviews, especially for complex structures, to avoid exposure to adjustments or penalties under the ATO’s Top 500 program.
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Top 500 tax performance program 2025 findings report | Australian Taxation Office
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TPB report underscores a stronger, more resilient tax profession
The TPB has released its 2024–25 Annual Report titled Strengthening integrity and supporting the tax profession. The report highlights significant progress in improving professional standards, regulatory performance, and community protection.
Key achievements include:
- a streamlined annual registration process, with 95% of renewals and new registrations processed within 30 days while maintaining strict checks on education, experience, and ethics;
- expanded practitioner support through education and guidance. The TPB delivered 26 webinars to more than 102,000 attendees and released 50 new guidance products covering ethical obligations, breach reporting, and compliance expectations;
- a strengthened compliance program. The TPB assessed more than 13,000 complaints and referrals, imposed around 275 serious sanctions, and assisted about 3,500 clients to correct their tax affairs following adviser misconduct; and
- strong collaboration with government on reforms, including implementation of obligations under the 2024 Code of Professional Conduct and enhanced whistleblower protections.
The TPB is increasing both regulatory scrutiny and practitioner support. Staying compliant requires active engagement with new guidance, ongoing education, and a strong focus on ethical practice. This not only helps meet regulatory requirements. It also strengthens public trust and protects clients.
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TPB Annual Report 2024 - 25: Strengthening integrity and supporting the tax profession | Tax Practitioners Board
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Payday Super becomes law: Major change to when employers must pay super
The ATO and the federal government have confirmed that Payday Super is now law. From 1 July 2026, employers will be required to pay superannuation guarantee (SG) contributions at the same time they pay employees’ salaries and wages.
What’s changing?
- SG contributions must be paid on each pay-day (often weekly, fortnightly, or monthly) instead of quarterly. Contributions must reach the employee’s fund within 7 business days of pay-day (subject to limited exceptions);
- the concept of “qualifying earnings” (QE) is introduced, SG will be calculated on QE rather than just ordinary time earnings (OTE); and
- The previous SG payment system via the ATO Small Business Superannuation Clearing House will end, the clearing house will close on 1 July 2026.
The change aims to reduce unpaid or late super payments and improve retirement savings outcomes for employees, particularly those in casual, part-time or unstable employment.
For employers and advisers, the shift will likely demand updates to payroll systems, cash-flow planning and compliance procedures.
Businesses need to start preparing now, review payroll and payroll-software readiness, ensure super fund details are correct for all employees, test end-to-end processes, and assess cash-flow implications to ensure smooth compliance from 1 July 2026.
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Payday Super is now law | Australian Taxation Office
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