As the 2025 financial year draws to a close, several important tax changes will take effect from 1 July 2025, as outlined by the Australian Taxation Office (ATO). Here’s what individuals and businesses need to know:
1. Superannuation Guarantee Increase
The Superannuation Guarantee (SG) rate will rise to 12%, completing the final step in a series of scheduled increases. Employers will need to ensure their payroll systems are updated accordingly to remain compliant.
2. Car Depreciation and Luxury Car Tax Thresholds
From 1 July 2025:
- The car limit for depreciation and GST credits will be $69,674.
- The Luxury Car Tax (LCT) thresholds will be:
- $91,387 for fuel-efficient vehicles
- $80,567 for all other vehicles
The definition of fuel-efficient vehicles is also being revised, so it’s important to check the updated criteria when purchasing.
3. Removal of Lump Sum Reporting Threshold
The current $1,200 threshold for reporting back payments as Lump Sum E through Single Touch Payroll will be removed. This means all such back payments, regardless of the amount, must be reported.
4. Changes to Interest Deductibility
From 1 July 2025, General Interest Charges (GIC) and Shortfall Interest Charges (SIC) will no longer be tax deductible. This change may increase the after-tax cost of ATO interest for those with existing tax debts. If this applies to you, now may be a good time to review repayment options and consider reducing your ATO debt.
As change occurs, we’ll keep you posted through our social media accounts.
– John Kalachian, ICA
From the Regulators
Extended Deadline for Not-for-Profit Entities
The Australian Taxation Office (ATO) has extended the compliance deadline for Not-for-Profit (NFP) organisations that self-assess as income tax exempt. These entities now have until 30 June 2026—an extension from the original 30 June 2025 deadline—to ensure their governing documents meet the required standards.
To maintain tax-exempt status, NFPs must confirm that their governing rules:
- Prohibit the distribution of income or assets to members during the organisation’s operation and upon winding up.
This confirmation is made through the NFP self-review return, where organisations must answer ‘Yes’ to a question regarding these clauses.
Answering ‘No’ will result in the NFP being treated as a taxable entity.
If you’re unsure about your NFP’s eligibility or governing document requirements, our team at Fortis can provide the guidance and support you need to stay compliant.
Car Threshold Updates from 1 July 2025
The ATO has released updated car thresholds for the 2025–26 financial year, with several important changes affecting depreciation, GST credits, and luxury car tax (LCT) rules. These updates take effect from 1 July 2025.
1. Car Limit for Depreciation and GST Credits
The maximum value that can be used to calculate tax depreciation and GST credits for cars used in a business or income-producing activity is $69,674.
If the purchase price exceeds this amount, the maximum GST credit claimable is capped at $6,334, which is 1/11th of the car limit (unless an exception applies).
2. New Luxury Car Tax (LCT) Thresholds
The LCT thresholds for 2025–26 are:
- $91,387 for fuel-efficient vehicles
- $80,567 for all other vehicles covered by the LCT rules
3. Stricter Criteria for Fuel-Efficient Vehicles
From 1 July 2025, a vehicle will only be considered fuel-efficient—and therefore eligible for the higher LCT threshold—if it has a fuel consumption rating of no more than 3.5 litres per 100 km.
This is a significant tightening of the previous limit of 7.0 litres per 100 km.
Additionally, the indexation of thresholds for fuel-efficient and non-fuel-efficient vehicles will now be aligned, creating a more consistent approach going forward.
ATO Scam Alert: Protect Yourself This Tax Season
As we approach the end of the financial year, the ATO is warning taxpayers to be alert to a surge in ATO impersonation scams.
Reports of scam emails pretending to be from the ATO have jumped by over 300% compared to this time last year. Scammers are targeting individuals by sending fake messages designed to steal personal details, such as Tax File Numbers (TFNs), bank account information, or login credentials.
How to Stay Safe: Three Simple Steps
1. Stop
Never share your myGov or ATO online services login details. Only provide personal information if you’re sure the request is genuine. If you’re unsure—don’t respond.
2. Check
Pause and question the message. Is it really from the ATO? Do not click on links or QR codes in unsolicited emails or texts asking for information or login credentials.
3. Protect
If something doesn’t seem right—or if you notice suspicious activity—take action straight away. Contact the ATO or your accountant for guidance.
What the ATO Will Not Do
The ATO may send SMS or emails asking you to get in touch, but they will:
- Never include links asking you to enter personal information or login details.
- Never use social media platforms (e.g. Facebook, Instagram, LinkedIn, X) to request personal information, documents, or payments.
If you receive a suspicious message, it’s best to err on the side of caution. You can report scams directly via the ATO website or contact Fortis for advice before taking any action.
Stay vigilant. Stay safe.
End of Financial Year: Key Employer Obligations
As the 2024–25 financial year draws to a close, the ATO is reminding employers to stay on top of their end-of-year responsibilities. Here are the key actions and dates to keep in mind:
1. Super Guarantee (SG) Contributions – Due 28 July
- Ensure all superannuation contributions for the quarter ending 30 June are paid in full, on time, and to the correct fund by 28 July.
- For any payments made before 1 July, apply the current 11.5% SG rate.
2. SG Rate Increase – Effective 1 July 2025
- From 1 July 2025, the Super Guarantee rate increases to 12%.
- This new rate applies to all salary and wage payments made on or after 1 July, even if part of the pay period occurred in June.
3. PAYG Withholding Updates
- Some withholding schedules and tax tables will change from 1 July 2025.
- Make sure your payroll software is updated to ensure you withhold, report, and pay the correct amounts to the ATO.
4. Single Touch Payroll (STP) Finalisation – Due 14 July
- Submit your STP finalisation declaration by 14 July 2025.
- Finalise all employees paid during the financial year—including those who may have been terminated or not paid recently.
- This ensures employees have accurate information to lodge their tax returns.
Tip: If you’re changing payroll software providers, complete your STP finalisation in the current system before making the switch.
SMSF Annual Return: Updated for 2025
The ATO has released updated forms and instructions for the Self-Managed Superannuation Fund (SMSF) annual return for the 2025 income year.
If you’re a trustee or administrator of an SMSF, make sure you’re using the latest version when preparing your annual return. Using outdated forms could result in processing delays or compliance issues.
For tailored support with your SMSF obligations or lodging your return accurately, contact the team at Fortis—we’re here to help keep you compliant and confident.
Super Guarantee Rate Increases to 12% from 1 July 2025
From 1 July 2025, the Super Guarantee (SG) rate will increase to 12%. This is the final scheduled increase in the SG rate, completing the staged rollout over recent years.
What Employers Need to Know:
- The 12% rate applies to all salary and wages paid on or after 1 July, even if part of the pay period falls in June.
- Employers must ensure their payroll systems are updated to reflect the new rate from this date.
- The next quarterly SG due date is 28 July 2025. Contributions must be made at least quarterly, but can be paid more frequently.
Important Reminder About Tax Deductions:
- SG contributions are only tax-deductible when paid.
- If an employer misses the due date, it triggers a Superannuation Guarantee Charge (SGC), and the employer loses the ability to claim a tax deduction for those late contributions.
ATO Updates Monthly Foreign Exchange Rates for May and June 2025
The ATO has released updated monthly foreign exchange rates, now including data for May and June 2025.
These rates are used for converting foreign income, expenses, and transactions for tax reporting purposes. If you or your business deals in foreign currency, make sure you’re applying the correct rates for the relevant month.
Top 500 Private Groups: When to Seek Expert Tax Advice
The ATO is encouraging Top 500 private groups to engage qualified advisers when needed to ensure tax treatments are applied correctly. This is a key part of maintaining robust tax governance and aligns with Principle 3 of the ATO’s Seven Principles of Effective Tax Governance.
To meet the ATO’s expectations, groups should have documented procedures outlining when and how external advice should be sought.
Best Practice Guidance for Top 500 Groups:
- Define clear escalation thresholds – Include both quantitative (e.g. dollar value) and qualitative (e.g. complexity, reputational risk) factors.
- Keep advisers informed – Notify them of any significant changes to your group structure or new or unusual transactions.
- Ensure advice is based on accurate information – All facts and assumptions provided to advisers must be current and correct.
- Refer to ATO guidance – Always consider public rulings, practical compliance guidelines, and other ATO publications.
- Know when to engage with the ATO – For complex or high-risk matters, early engagement with the ATO may be appropriate, particularly where pre-lodgment agreements are being sought.
Establishing a strong tax governance framework protects your group from compliance risks and demonstrates a commitment to responsible tax management. Fortis can support you in designing, reviewing, or strengthening your governance processes.
Let us know if you’d like a tailored review of your existing documentation or escalation protocols.
Bendel Case Update: ATO Granted Special Leave to Appeal
On 12 June 2025, the High Court of Australia granted the ATO special leave to appeal the decision in the Bendel case. This case addresses a key tax issue: whether unpaid trust distributions owed to private companies should be treated as loans under Division 7A of the tax legislation.
What This Means for Taxpayers:
- Until the High Court hands down its decision, the ATO will continue to apply the law as outlined in Tax Determination TD 2022/11.
- The ATO will not grant a blanket extension for lodging tax returns impacted by this matter. Companies must continue to meet their existing obligations.
If your company is involved in unpaid trust distributions, or you’re unsure whether Division 7A applies, now is a good time to seek professional advice. Fortis can assist with a review of your trust and company arrangements and help ensure compliance while this legal uncertainty is being resolved.
SMSF Trustees: Don’t Forget Your Declaration Obligations
The ATO is reminding trustees and directors of corporate trustees of self-managed superannuation funds (SMSFs) of their obligations to complete and retain trustee declarations.
Key Requirements:
- A trustee declaration must be completed within 21 days of becoming a trustee or a director of a corporate trustee.
- The declaration confirms that the individual understands their legal obligations and responsibilities under superannuation law.
- Trustees must retain this document for the longer of:
- While they remain a trustee, or
- 10 years from the date it was signed.
Core Trustee Responsibilities:
SMSFs must be run solely for the benefit of members’ retirement savings. This includes:
- Protecting and appropriately managing super fund assets
- Making decisions in the best interests of all members
- Ensuring all fund activities comply with superannuation laws
- Developing, implementing, and regularly reviewing the SMSF’s investment strategy
Ongoing Administrative Duties:
Trustees are also responsible for:
- Keeping records for the required timeframes
- Appointing an approved SMSF auditor annually
- Lodging the SMSF annual return by the due date
- Notifying the ATO of any changes to the fund
Fortis can support you in meeting your trustee obligations and ensuring your SMSF is compliant and well-governed. If you’re setting up a new fund or have recently become a trustee, get in touch for guidance on completing your trustee declaration.
SMSF Reminder: Transfer Balance Account Reporting Due 28 July
The ATO requires all SMSFs to report Transfer Balance Account (TBA) events through a Transfer Balance Account Report (TBAR)—regardless of the member’s total superannuation balance.
Key Points:
- TBARs for the June quarter are due by 28 July.
- If no TBA events occurred during the quarter, no lodgment is required.
- Failing to lodge a required TBAR on time may result in:
- ATO compliance action
- Administrative penalties
- Potential inaccuracies in a member’s transfer balance account, which can affect their entitlement to tax concessions.
What Is a TBA Event?
TBA events include:
- Starting a retirement phase income stream
- Commuting or partially commuting a pension
- Certain death benefit income streams
- Structured settlement contributions
Work-from-Home Deductions: What You Need to Know for 2025
The ATO has released updated guidance to help taxpayers claim working-from-home (WFH) deductions correctly for the 2024–25 income year. Here are the key questions and answers you need to be aware of:
1. What is the fixed rate for 2025?
- The fixed rate for WFH expenses is 70 cents per hour for the 2024–25 income year.
- This rate includes electricity, gas, internet, phone use, and consumables.
- It has increased from 67 cents per hour in 2023–24.
2. Is there a minimum number of hours required?
- No minimum hours are required.
- To claim WFH expenses, you must:
- Be genuinely working from home (not just checking emails or taking calls occasionally)
- Incur additional running costs because of working from home
- Keep records that prove these expenses
3. What records are required for claiming hours worked from home?
- If using the fixed rate method, you must keep a record of every hour worked at home from 1 July 2024 to 30 June 2025.
- Acceptable formats include:
- Diaries, timesheets, spreadsheets, or rosters
- Records must be made on the day or soon after—estimates are not accepted.
If using the actual cost method, you’ll need:
- Evidence of actual expenses (e.g. bills, receipts), and
- A 4-week diary that represents your typical work-from-home pattern
4. How do I prove work-related phone and internet use?
- For the actual cost method, you’ll need to calculate a work-related percentage for your phone or internet use.
- The easiest way is to keep a 4-week diary or spreadsheet showing:
- Number of work calls vs personal calls
- Time spent online for work vs private browsing
5. Can rent be claimed as part of WFH expenses?
- Generally, employees cannot claim rent, mortgage interest, or home insurance unless the home is set up as a dedicated place of business.
- Even if eligible, claiming occupancy expenses may affect your main residence CGT exemption when selling the property.
Need help deciding which method is right for you? The Fortis team can help you calculate your deduction, ensure your records meet ATO standards, and avoid common pitfalls.
Rulings, Determinations, & Guidance
Central Management and Control Test: ATO Updates Guidance for Foreign-Incorporated Companies
The ATO has updated Practical Compliance Guideline (PCG) 2018/9, which provides guidance on how foreign-incorporated companies can assess whether they are Australian tax residents under the central management and control (CM&C) test in section 6(1) of the Income Tax Assessment Act 1936.
Key Update: New Paragraph 5D for Public Companies
A new paragraph, 5D, has been added to support public companies that are required to prepare a Consolidated Entity Disclosure Statement (CEDS) as part of their annual financial reporting. The CEDS must include:
- The company’s and its subsidiaries’ Australian and foreign tax residency status,
- For each financial year starting on or after 1 July 2023.
Risk Assessment Implications:
From financial years commencing on or after 1 July 2024, the ATO may consider a company not to be ‘low-risk’ under PCG 2018/9 if:
- The company self-assesses as a non-resident for Australian tax purposes, but
- Reports as an Australian tax resident in its CEDS.
This inconsistency can trigger closer ATO scrutiny.
Legislative Context
This update reflects changes made under the Treasury Laws Amendment (Fairer for Families and Farmers and Other Measures) Act 2024.
For foreign-incorporated entities operating in or connected with Australia, this is a timely reminder to review your governance structures, tax residency declarations, and financial reporting practices to ensure they are consistent and defensible.
Need help navigating the CM&C test or updating your risk profile? Contact the Fortis team for tailored advice.
Simplified Accounting Method (SAM) for Supermarkets and Convenience Stores
The ATO has released a draft legislative instrument—A New Tax System (Goods and Services Tax) (Simplified Accounting Methods – Supermarket and Convenience Stores) Determination 2025—that continues to allow eligible businesses to use the Simplified Accounting Method (SAM) for GST reporting.
What is the SAM?
The SAM provides a simplified way to calculate input tax credits. Under this method:
- You subtract estimated GST-free acquisitions from total acquisitions,
- Then multiply the difference by 1/11th to calculate GST credits.
To estimate GST-free acquisitions:
- Apply the GST-free sales percentage to trading stock purchases for each Business Activity Statement (BAS) period.
Who Is Eligible?
To use the SAM, a business must:
- Be registered for GST
- Have a GST turnover of $2 million or less
- Ensure less than 5% of total consideration comes from taxable or GST-free supplies other than trading stock
- Have adequate point-of-sale systems to track GST-free sales
This method reduces record-keeping complexity and is especially useful for small supermarkets and convenience stores with mixed supplies. If you’re unsure whether your business qualifies or would benefit from using the SAM, the Fortis team can help assess your eligibility and handle your BAS preparation with confidence.
Foreign Ownership Reporting: More Flexibility for Registration Deadlines
The ATO has released a draft legislative instrument—Foreign Acquisitions and Takeovers (Register Notices – Extensions of Time) Instrument 2025—which introduces greater flexibility for foreign persons required to register certain acquisitions or disposals in Australia.
Current Requirement
Foreign persons who acquire or dispose of interests in Australian land, water, entities, businesses, or other assets must notify the Commissioner of Taxation (as Registrar) within 30 days of the event. These notifications are recorded in the Register of Foreign Ownership of Australian Assets.
What’s Changing?
Under the draft instrument:
- The Registrar may extend the 30-day deadline by any number of days
- Multiple extensions may be granted where appropriate
When Might Extensions Be Granted?
The accompanying Explanatory Statement outlines scenarios where an extension could be appropriate, such as:
- Complex corporate transactions
- Unexpected administrative delays
- Entities only recently becoming aware of their registration obligations
This change provides welcome flexibility for foreign investors navigating complex or evolving transactions. If your business is involved in cross-border acquisitions or disposals, it’s important to understand your obligations and the timelines involved.
ATO Flags Anti-Avoidance Risk in Certain ESIC Investment Arrangements
The ATO has issued Tax Determination TD 2025/3, clarifying that the general anti-avoidance provisions under Part IVA of the Income Tax Assessment Act 1936 may apply to certain investment arrangements involving Early Stage Innovation Companies (ESICs).
What’s the Concern?
This follows concerns raised in Taxpayer Alert TA 2024/1, where some promoters have been facilitating circular financing schemes that allow investors to:
- Claim ESIC tax offsets, while
- Recirculating funds back to themselves with little or no financial risk
These schemes are designed to exploit the ESIC tax offset system rather than support genuine innovation or startup investment.
ATO Response Under Part IVA:
- If the ATO determines that Part IVA applies, the usual 2-year amendment period may be extended to 4 years
- This gives the Commissioner more time to review and amend affected tax returns
If you’ve participated in an ESIC investment or been approached with a structured arrangement, it’s important to ensure your investment is genuine and not part of a scheme that could trigger anti-avoidance provisions.
ATO Releases 2025–26 Reasonable Travel and Overtime Meal Allowances
The ATO has issued Tax Determination TD 2025/4, which outlines the reasonable amounts employees can claim without needing to substantiate every expense under Subdivision 900-B of the Income Tax Assessment Act 1997.
These updated amounts apply for the 2025–26 income year and relate to:
1. Overtime Meal Expenses
- Applies when employees purchase food and drink while working overtime
- A reasonable allowance amount can be claimed without detailed receipts if supported by an allowance and consistent with ATO guidelines
2. Domestic Travel Expenses
- Covers accommodation, meals, and incidentals while travelling overnight for work within Australia
- Specific rates are provided for:
- Employee truck drivers
- Office holders covered by the Remuneration Tribunal
- Federal Members of Parliament
3. Overseas Travel Expenses
- Applies to food, drink, and incidental costs incurred while working overseas
- Reasonable daily amounts vary depending on the country and travel destination
These amounts provide a practical way for employees to claim work-related travel and meal expenses without needing to keep receipts, as long as they receive an allowance and follow the ATO’s conditions.
Home Office and Car Expenses: ATO Responds to Tribunal Decision in Hall Case
The ATO has released an Interim Decision Impact Statement following the Administrative Review Tribunal’s decision in Hall and Commissioner of Taxation [2025] ARTA 600.
Background of the Case
The Tribunal allowed a taxpayer to claim home office and car expense deductions for work undertaken during COVID-19 lockdowns. The taxpayer was required to work from home, prompting a review of the eligibility for rent and travel deductions.
ATO’s Current Position
Despite the Tribunal’s findings, the ATO maintains its established interpretation of the law:
- Home Office (Rent) Deductions
The mere use of a room in the home for work during lockdowns does not entitle the taxpayer to a rent deduction. There must be a clear, exclusive, and substantial use of the space for income-producing activities. - Car and Travel Expenses
Travel between home and a regular workplace, even if some duties are performed at home, remains non-deductible. The ATO views this travel as a private expense, as it occurs before income-earning activities commence—regardless of whether it happens during work hours or under lockdown conditions.
What This Means for Taxpayers
Until the appeal process concludes, the ATO will continue to apply the law based on its current guidance, including:
- TR 93/30 – Deductions for home office expenses
- TR 2021/1 – Deductions for employee transport expenses
- *Employees guide for work expenses
If you’re unsure about what qualifies as a legitimate work-related expense—especially when working from home or travelling between locations—the Fortis team can help ensure your deductions are compliant with ATO expectations.
Cases
FBT on Luxury Cars: Court Rules Benefits to Directors Were Employment-Related
The Federal Court has overturned a previous AAT ruling in the case of BQKD v Commissioner of Taxation [2024] AATA 1796, reinforcing that non-cash benefits—like luxury car use—can trigger Fringe Benefits Tax (FBT) when they are connected to an individual’s role within a business, even where no formal salary is paid.
Background of the Case
- A family trust operated a business through a corporate trustee, with three brothers as directors and shareholders of the trustee company.
- The company owned over 40 luxury and high-performance vehicles, made available to the brothers for private and business use.
- There were no written employment contracts, and the trust did not pay the brothers any direct salary—only trust distributions and superannuation contributions.
- The ATO assessed the trust for FBT for the 2016 to 2020 FBT years, arguing that the car use constituted a benefit in connection with employment.
Initial AAT Decision
The AAT originally ruled in favour of the taxpayer, finding:
- The brothers were not employees under general legal principles
- The vehicles were accessed by the brothers in their capacity as beneficiaries, not employees
- Therefore, the benefits were not subject to FBT
Federal Court Decision
The Federal Court disagreed, allowing the ATO’s appeal. Key findings included:
- Section 137(1) of the FBT Act can deem someone an employee for FBT purposes, even if they don’t receive cash wages, if they receive non-cash benefits that could be considered salary or wages if provided in cash.
- The objective evidence showed the brothers:
- Performed significant work in the business
- Received valuable benefits (e.g. luxury cars) tied to that work
- The Court ruled these factors satisfied the FBT definition of employment, regardless of their subjective belief that they were accessing the cars as beneficiaries.
Why This Matters
This decision highlights a common issue in private group structures, where individuals may act as directors, shareholders, and beneficiaries—blurring the lines between roles.
Key considerations include:
- Whether non-cash benefits are provided in connection with employment duties
- Whether the benefit might instead fall under Division 7A (if provided in the capacity of a shareholder)
- How this affects FBT liability, deductibility, and GST claims
If your business or trust structure involves company directors or beneficiaries receiving non-cash benefits (like cars, property use, or other perks), now is the time to review your arrangements. The Fortis team can help clarify whether these benefits are employment-related and assess your exposure to FBT, Division 7A, or other tax consequences.
Tribunal Denies Travel Deductions for Time Outside Employment Duties
In a recent decision, the Administrative Review Tribunal (ART) ruled that a taxpayer—a salaried employee of a major oil and gas company—was not entitled to claim travel expense deductions for trips undertaken outside the scope of his core employment duties.
Key Findings:
- Although the taxpayer lived in Queensland and occasionally worked from home or the employer’s Perth office, his primary place of work was an offshore facility.
- The Tribunal found his employment duties only commenced upon arrival at the offshore facility and ended upon departure.
- As a result, expenses related to travel before and after these offshore periods—including travel to Broome, Perth, Brisbane, and quarantine stays in Darwin—were considered private in nature and not deductible.
Other Deduction Outcomes:
- Denied: Depreciation claims for an Omega watch and a toolbox, as they were not sufficiently connected to the taxpayer’s work duties.
- Allowed in full: The taxpayer’s home office expenses, with the ART overturning the ATO’s initial decision to allow only 50%. The Tribunal recognised that these expenses were genuinely incurred in performing work duties from home.
This case reinforces the ATO’s view that travel between home and a primary worksite is private, even if it involves multiple locations or unusual circumstances such as quarantine. It also highlights the importance of demonstrating a clear connection between claimed items and work duties.
Non-resident despite Australian connections
In a recent case, the Administrative Review Tribunal (ART) overturned an ATO decision, concluding that the taxpayer was not an Australian resident for tax purposes during the 2014 income year, despite maintaining several ties to Australia.
Case Background:
- The taxpayer held executive roles with a business operating in China, where he lived from 2009 until early 2015.
- The ATO had initially assessed the taxpayer as a resident of Australia while working overseas, applying administrative penalties and interest.
- The Tribunal disagreed, finding the taxpayer had established a permanent place of abode in Shanghai and had effectively ceased Australian residency during the period in question.
Key Factors Considered:
While the taxpayer maintained several connections to Australia, the Tribunal found these were largely administrative or family-related, and did not establish residency:
- Bank accounts: Joint accounts were used to support the family in Melbourne; income was earned in China and spent via company cards or a Hong Kong-issued credit card.
- Health insurance: While still covered by an Australian family policy, usage was minimal, and the ATO couldn’t prove cost-saving by removal.
- Driver’s licences: He kept a Victorian licence for convenience during visits but held a Chinese licence and had regular access to vehicles in Shanghai.
- Mail and communications: Retained a Melbourne GPO box, with mail forwarded digitally due to concerns about postal reliability in China.
- Residency and work rights: Though using an APEC Business Travel Card with a 60-day stay limit, the taxpayer managed to remain in China long-term due to his senior corporate roles, despite not having a fixed-term contract.
Tribunal Decision:
The Tribunal found that the taxpayer’s long-term physical absence from Australia, combined with the establishment of a settled life in China, was sufficient to conclude he was not a resident of Australia for tax purposes in 2014. As a result, penalties and interest were not payable.
This case highlights that Australian residency for tax purposes is not determined solely by ties to Australia—but rather by the totality of the person’s living arrangements and intentions.
If you or your clients work internationally or maintain cross-border ties, it’s critical to assess residency status carefully each year. Fortis can provide tailored residency assessments and support in managing ATO reviews or disputes.
If you have any questions regarding the above information, please do not hesitate to contact our office to speak to one of our team.
