What is being measured is changing, not the rate.

Australia has introduced Bills for a proposed 2.5 per cent non-deductible charge on certain large digital platform groups, applying from the 2025-26 financial year if enacted. A separate foreign resident CGT Bill would broaden the concept of real property and replace point-in-time principal asset testing with a 365-day look-back. At the multilateral level, a new United Nations Co-Lead's Draft on cross-border services proposes nexus and allocation rules that do not rely on permanent establishment concepts. Meanwhile, recent Pillar Two announcements show registration, notification, filing, payment, penalty and interest relief increasingly moving on separate tracks.

Three Bills have been introduced into the Commonwealth Parliament and were recorded on the Parliament of Australia website on 13 August 2026: the News Media Bargaining (Administration) Bill 2026, the News Media Bargaining Charge Bill 2026, and the Treasury Laws Amendment (News Media Bargaining) (Consequential) Bill 2026. Nothing has been enacted. The package is proposed to apply in relation to the 2025-26 financial year and later years.

The liability trigger has two limbs. An entity is liable for the charge in a financial year if the entity or a member of its group provides a significant social media service or internet search service in Australia, and the group has total relevant Australian digital advertising revenue exceeding $250 million for that financial year. The charge is then imposed at 2.5 per cent, applied to the entity's total relevant Australian digital advertising revenue from the second-most-recent financial year before the current year. That two-year lag between the measurement year and the liability year is a design choice worth understanding early, because it means the base for the first year of application is already historic.

The liability may be offset, partially or wholly, by entering into commercial deals with Australian news businesses to produce or use news content, with an uplift factor applied to expenditure on those deals. The offset is the point of the measure. The charge is designed to be avoided by contracting rather than paid.

Several features of the administration deserve attention. The obligation to pay the charge is not deductible, by amendment to the Income Tax Assessment Act 1997, although non-capital expenditure incurred in managing tax affairs relating to the charge is deductible. A parent entity must ensure a return in the approved form is given to the Commissioner if the entity would be liable, even where the charge is reduced to nil after applying the offset, with the return due within six months after the end of the financial year. The Taxation Administration Act 1953 is to be amended so that where a liability arises the Commissioner can issue an assessment at any time, including where the entity has not lodged. And the Administrative Decisions (Judicial Review) Act 1977 is amended to exclude decisions under the Administration Bill from judicial review under that Act, on the footing that merits review of an assessment is available.

The package was previously released in draft. Changes made after consultation include a higher rate, a refined scope of revenue for determining liability, and changes to the calculation of the charge and to the offset uplift rates.

For the small population of groups directly in scope this would be a substantial new obligation with a historic measurement year, a nil-liability return requirement and a rule permitting the Commissioner to make an original assessment at any time. For everyone else the interest is structural. Australia now has, or is close to having, three separate imposts on large groups that do not run off taxable income and are each computed on a different base: the diverted profits tax, which taxes a diverted profits amount at 40 per cent under Part IVA of the Income Tax Assessment Act 1936; the Pillar Two domestic minimum tax, which works off a financial accounting derived measure of GloBE Income; and this charge, which works off gross Australian advertising revenue with no deduction and no loss recognition. Groups that model an Australian effective tax rate off taxable income are increasingly modelling only part of the Australian cost.

The foreign resident capital gains tax reform was introduced into Parliament on 2 July 2026 as part of the Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026, and remains before Parliament. Three aspects warrant attention, and each of them independently increases the compliance burden on foreign participants in Australian transactions.

The first is the new statutory definition of "real property". The term has not previously been defined for income tax purposes. Under the reform it would capture anything that is fixed or installed on Australian land, as well as any lease, licence or contractual right exercisable over such assets. The formulation is materially broader than the conventional focus on land and interests in land, and it creates a potential overlapping-rights valuation issue because more than one real property related interest may exist in relation to the same underlying asset. The illustration used in the explanatory materials is a data centre. The information technology company with a right of access under a licence, the data centre operator with its freehold or leasehold interest, the underlying landowner where the operator holds only a lease, parties providing property management services under contractual rights in relation to land, and parties with statutory rights in respect of infrastructure installed on land held by unrelated persons, may each hold a real property interest.

Where such an interest is held directly by a foreign resident it may constitute taxable Australian real property. Where it is held by an entity in which a foreign resident holds a membership interest, it may form part of that entity's TARP assets for the purpose of determining whether the membership interest is an indirect Australian real property interest. Broadly, an IARPI arises where the foreign resident and its associates hold 10 per cent or more of the entity and more than 50 per cent of the entity's underlying value is attributable to TARP. Foreign resident shareholders disposing of interests in a target may therefore find that what were previously non-taxable membership interests are now IARPIs, with valuation of the separate rights adding materially to cost.

The second is the new notification requirement. Under the current law a foreign resident vendor may give the purchaser a declaration that the membership interests are not IARPIs, and the purchaser then acquires without withholding at 15 per cent. Under the introduced Bill, a foreign resident vendor disposing of relevant membership interests with an aggregate market value of at least $50 million would be required to notify the Commissioner before providing the declaration. The threshold moved during development, having been put at a lower figure in earlier consultation material, so the introduced provision should be checked rather than the consultation paper. The notification must be lodged at least 28 days before transfer where the review period exceeds 31 days, or as soon as reasonably practicable where the review period is 31 days or fewer. The purchaser cannot rely on the declaration unless those requirements are satisfied. A Ministerial power will allow transaction types, for example schemes of arrangement and regulated acquisitions, to be exempted by legislative instrument.

The third is the change in the knowledge standard. At present a purchaser is required to withhold only where it has actual knowledge that the declaration is false, which is why bidders have been able to rely on vendor declarations without extensive independent enquiry. The reform replaces that subjective test with an objective one: a purchaser cannot rely on a declaration where it knows, or where it could reasonably be concluded, that the declaration is false. The explanatory memorandum indicates that purchasers are expected to undertake and document proportionate, customary enquiries, including review of ASIC and ABR extracts, transaction documents and vendor disclosures, and to retain records. The difficulty is that those enquiries may not, without target financial and valuation information, establish whether the relevant membership interest satisfies the principal asset test. Transaction documentation should therefore allocate responsibility for supplying and substantiating that information.

Sitting behind all three is the change to the principal asset test itself. It will no longer be a point-in-time test. A non-portfolio membership interest will be an IARPI if the underlying entity derives more than 50 per cent of its market value from TARP at any time during the 365 days preceding the disposal. A Ministerial power will allow alternative testing times to be determined by legislative instrument, and how useful that turns out to be depends entirely on how broadly the circumstances are prescribed. For a scheme the relevant CGT event occurs on implementation. For a takeover bid it occurs on the date the offer becomes unconditional where acceptance precedes that date, and on the date of acceptance where acceptance occurs on or after it. In each case the vendor has to be able to demonstrate that at no point in the preceding 365 days did the target derive more than half its market value from TARP.

What clients should do: for any Australian holding structure with relevant foreign resident shareholders holding 10 per cent or more, counting associates, establish a process for identifying material changes in TARP and non-TARP value throughout the 365-day period, supported by periodic valuations and event-driven testing where appropriate. The point is that a look-back period cannot be substantiated retrospectively from a single valuation taken at disposal. On sell-side, build the $50 million notification into the deal timetable as a pre-signing item. On buy-side, expect the due diligence request list to grow, and consider whether the prudent course where doubt remains is simply to withhold and let the vendor claim.

The fifth session of the Intergovernmental Negotiating Committee produced two significant texts in the second week of proceedings, and they pull in different directions from an Australian outbound perspective.

The first is the Co-Lead's Draft Protocol on the Taxation of Income from Cross-Border Services, document A/AC.298/CRP.33, unveiled at the eleventh and twelfth meetings when the session resumed on 10 August 2026 and reported on 11 August 2026. The co-lead described its features as a broad scope of application coupled with different treatment for different categories of services through source and nexus rules and potentially different rate limitations; the departure from permanent establishment and income attributable to a permanent establishment as the operative nexus and allocation concepts for services within scope, replaced by revised substantive rules and new terminology; and the possibility for taxpayers to elect to have income from remote services taxed as if they had a physical presence in the source jurisdiction, with the amount subject to tax then determined under the draft's allocation methodology by reference to revenue connected with the source jurisdiction. Article 1 includes a subject-to-tax rule based on the 2025 United Nations Model, and the draft appears to incorporate articles 12AA, 12B and 12C of the United Nations Model.

Several Member States raised concerns about how article 1 would override or operate alongside equivalent provisions in existing bilateral treaties, and called for the draft to be replaced with the earlier text of 29 June 2026. Others, including members of the Africa Group, welcomed it. The co-lead noted that participation in the Protocol is optional, though the mechanism for applying the new rules is undecided, and welcomed a Swiss suggestion allowing Member States to choose between automatic and bilateral application. The co-lead also stated that the Committee is striving for a consensus-based solution but that it will otherwise resort to a majority vote.

Two subsidiary points from the same week are worth recording. On article 3, because the Protocol does not cover royalties, the definition allows royalties to be excluded and defaults to the definition in any applicable tax agreement, which preserves the primacy of existing bilateral royalty articles. On article 6, which is closely based on article 12B of the 2021 United Nations Model, the co-lead raised whether artificial intelligence needs to be specifically addressed or whether the general definitions suffice, noting that AI agents and similar tools would appear to fall within the scope of services requiring minimal human involvement from the service provider.

The second text is the Co-Leads' Draft Protocol on the Prevention and Resolution of Tax Disputes, presented at the fifteenth and sixteenth meetings of the fifth session and reported on 13 August 2026. Chapter II covers prevention, including advance pricing agreements, advance rulings, coordinated unilateral APAs, cooperative compliance arrangements, simultaneous audits and joint audits. Chapter III covers resolution through mutual agreement procedure, mediation and conciliation, and arbitration. Chapter IV deals with consultations in the absence of an applicable tax instrument. The stated advantages include creating mechanisms where none currently exist, so that for parties without a bilateral tax treaty certain mechanisms may operate on the basis of an existing tax information exchange relationship, and providing multilateral procedures for multi-jurisdictional cases rather than serial bilateral processes. Chapter V permits reservations, so a party may decline specified mechanisms.

For an Australian group the two drafts have to be read together. If adopted and brought into effect in their present form, the draft services protocol could confer additional source country taxing rights over specified cross-border service income in markets where Australian engineering, mining services, technology and professional services groups currently operate without a taxable presence, and the draft disputes protocol could, for the first time, offer a route to relieve the resulting double taxation in markets where no bilateral treaty exists. Whether the second keeps pace with the first depends on the reservation architecture, and the reservation architecture means coverage will need to be mapped mechanism by mechanism rather than answered with a single question about whether an instrument is in force.

Nothing here is imminent. What is worth doing now is knowing, for the top handful of non-treaty markets into which the group charges services, what the gross fee flow is and what a source withholding at a plausible rate would cost, because that is the number that will determine whether this matters to your group or not.

The Pillar Two compliance calendar has been treated by most groups as a single sequence. Several developments this week suggest it is better treated as three sequences that have to be tracked separately.

Belgium published a clarifying press release on 29 July 2026, reported on 10 August 2026, confirming that the GloBE Information Return notification, which identifies the entity that will submit the GIR, must be submitted by 30 September 2026. The clarification confirms which fiscal years the extended notification deadline covers: fiscal years beginning between 31 December 2023 and 31 December 2024 and ending no later than 28 February 2025, and fiscal years beginning on or after 1 January 2025 and ending no later than 31 May 2025. Belgium extended the notification deadline. It did not extend the GIR filing deadline. A group that reads the announcement as a general extension will discover the gap only at filing.

The Netherlands took a different approach. Decree No. 2026-14582 of 30 July 2026, published in the Official Gazette on 7 August 2026, modifies the Decree on Administrative Fines so that no penalties will be imposed for non-compliance with top-up tax information filing obligations and related payments until 31 October 2026. An updated question and answer document published on 10 August 2026 confirmed that no default fines or offence fines apply to the return filing obligation and the obligation to pay by return up to and including 31 October 2026, and made two further points. The fine relief has no consequences for the rules on the appeal period or on tax interest, so interest continues to accrue. And while the authorities will not grant a filing extension, they will be restrained in imposing fines where the top-up tax information declaration for book years ending 31 December 2024 is filed by the end of 2026. The practical Dutch landing zone for those book years is therefore 31 December 2026, with an interest cost attaching to the delay.

Barbados announced a further waiver on 31 July 2026. Qualifying entities with a year end of 31 December 2024 will not face late penalties or interest if they complete all notification and GIR filings and settle all top-up tax payments by 30 September 2026, filed through the AEOI Global Relations Portal with payment through TAMIS. The statutory deadline of 30 June 2026 has not been extended, so a late filing remains a breach and only the sanction is relieved. That distinction matters for any group with a disclosure obligation that is triggered by non-compliance rather than by penalty.

Luxembourg issued a reminder on 6 August 2026 setting out registration with the tax authorities and the two filings that follow it, being the information statement for the supplementary tax or notification of the identity and jurisdiction of the entity filing it, and the declaration concerning the additional tax, all to be carried out exclusively through MyGuichet.lu. The reminder was expressed to be issued in light of the approach in the OECD document "Safe Harbours and Penalty Relief: Global Anti-Base Erosion Rules (Pillar Two)" of 20 December 2022, which suggests the transitional penalty relief standard will be applied by reference to whether reasonable measures were taken.

On the substantive side, the German Federal Cabinet approved the draft Annual Tax Act 2026 on 12 August 2026, which includes implementation of the OECD Side-by-Side Package. It still has to pass the Bundestag and the Bundesrat. Italy gazetted Legislative Decree No. 148/2026 of 7 August 2026 in Official Gazette No. 185 of 11 August 2026, in force from 12 August 2026, which transposes the latest international agreements within the global minimum tax framework. The same decree increases withholding tax on dividends paid to pension funds established in an EU Member State or EEA country to 20 per cent, amends the anti-abuse rules on tax loss carry-forwards including final losses of qualifying EU and EEA entities, and extends the deadline for obtaining certification of a qualifying tax control framework for taxpayers that applied to the cooperative compliance program in 2024 and 2025.

The ATO also published guidance this week on lodging, paying and other obligations for Pillar Two, covering lodgment requirements, payment processes, record-keeping expectations and key due dates for affected groups. Read against the jurisdictional divergence above, it is the reference point for the Australian columns of the tracker, and it is worth reconciling against the 31 December 2026 dates for 30 June 2025 year ends set out below.

What clients should do: separate the group's Pillar Two tracker into registration, notification, filing and payment columns by jurisdiction, because relief is now being granted at different points in the sequence in different places. Where penalties are relieved but interest continues, the matter remains a compliance exception and also becomes a provisioning and tax accounting question that should be raised with the audit team before year end, not at it. Foreign dates and relief conditions in the table below should be confirmed against the relevant local authority guidance before action is taken.

Two European decisions published this week address intra-group financing from opposite ends, and both travel further than their jurisdictions.

The German Federal Financial Court decided IV R 36/23 on 11 June 2026, made available on 6 August 2026. A Dutch resident company held a 100 per cent interest in a German limited partnership and was included in a Dutch fiscal unity. The Dutch parent lent to the Dutch company, which used the funds to finance the German partnership's operations. Under German rules the interest was generally deductible at partnership level as special business expenses. Under the Dutch consolidation rules neither the parent's interest income nor the borrower's interest expense was recognised. The question was whether section 4i of the Income Tax Act, introduced in 2016 in connection with BEPS Action 2, requires the foreign expense to be recognised through a formal tax deduction under foreign computation rules before a German deduction can be denied.

The Court held that it does not. Section 4i does not require the reduction of the foreign tax base to occur in respect of the same taxable person entitled to the German deduction. It requires only that the special business expenses reduce the taxable result of a taxable person in the other state, regardless of how that is technically achieved under foreign law, and the provision is to be applied on the basis of an economic analysis. It is irrelevant whether the expense is shown as a deduction item, and a reduction occurs even where expense and corresponding income are disregarded as intra-group transactions under a foreign group taxation regime. Unlike the lower court, which had looked at interest income and expense separately, the Court considered them together.

The Australian read-across is worth testing. On the Court's economic analysis, a structure in which a foreign partner of a German partnership incurs special business expenses deductible in Germany, and is funded from within a foreign group consolidation regime that eliminates the corresponding income and expense, may be exposed to German deduction denial. An Australian tax consolidated group may present a potentially analogous economic outcome, although the Australian single entity rule in section 701-1 of the Income Tax Assessment Act 1997 operates through a different legal mechanism, treating subsidiary members as parts of the head company so that an intra-group loan is disregarded rather than eliminated on consolidation. Whether that distinction matters to section 4i has not been decided. Groups with German partnership investments funded from an Australian consolidated group would be sensible to take German advice rather than assume that the absence of a net foreign deduction answers the question.

The Luxembourg Administrative Court decided case no. 53194C on 22 July 2026, reported on 10 August 2026. The taxpayer had lent at 12 per cent to a French company in which it held 65 per cent, funded by bond issuances subscribed by its Luxembourg parent. After the borrower's position deteriorated, a 2017 restructuring involving the borrower, the lender, an unrelated joint venture partner and other stakeholders produced a partial waiver of interest accrued in 2017, conversion of part of the debt to equity in 2018, a reduction of the rate on the remaining debt to 6 per cent, a reorganisation that reduced the taxpayer's holding from 65 per cent to 20 per cent of a larger company, additional guarantees, and concessions by the joint venture partner and third party participants. The tax authorities argued that the interest waiver was not arm's length and was a hidden contribution, and that part of the interest expense on the parent bonds was non-deductible because interest should have been computed on a reduced market value rather than the nominal amount. They relied principally on the transfer pricing study that had supported the original loan.

The Court found for the taxpayer on both points, under articles 56 and 56bis of the Income Tax Law. Referring extensively to the OECD Transfer Pricing Guidelines, it held that arm's length pricing must be assessed in light of the circumstances existing at the time of the relevant transaction, and that a debt restructuring requires consideration of the alternatives realistically available to the parties at that time and the economic conditions then prevailing. An independent lender may rationally reduce or waive part of its claim where that increases the likelihood of preserving value. The presence of unrelated third parties making concessions in the same restructuring reinforced the commercial rationale. On the second point, the Court held that debts are generally valued at the amount received and to be repaid, that reduction below nominal is justified only in exceptional circumstances, and that interest accrues on the contractual principal, not on a depreciated market value.

Two propositions are worth taking from it. A historic transfer pricing study supporting the original terms of a loan is not authority for maintaining those terms once the borrower's circumstances change, and the options realistically available have to be re-tested at the restructuring date. And the Court rejected the attempt to re-base interest on a marked-down debt value, holding that interest accrues on the contractual principal. An attempt to substitute a marked-down debt value for the contractual principal would also require careful justification under Subdivision 815-B, although no directly equivalent Australian authority has been identified. For Australian groups carrying distressed related party loans, the practical point is evidentiary: the third party concessions in the same restructuring were what made the commercial rationale demonstrable, and a restructuring carried out entirely within the group will need its comparability analysis built rather than observed.

United States. Proposed regulations under sections 898 and 960, reported 10 August 2026, implement two international provisions of the One Big Beautiful Bill Act. The one-month CFC taxable year deferral election under section 898(c)(2) is repealed for taxable years beginning after 30 November 2025, so affected CFCs must align with the majority United States shareholder's year and will generally have a one-month first required year, allocated by reference to taxable income determined under foreign law with elections available for income-group-specific percentages or for no allocation at all. Separately, the deemed paid percentage under section 960(d)(1) rises from 80 to 90 per cent, and new section 960(d)(4) imposes a further 10 per cent disallowance on foreign taxes associated with later distributions of section 951A previously taxed earnings and profits, applying only to PTEP from inclusions in shareholder years ending after 28 June 2025. Comments close 17 September 2026. The effective foreign tax credit cost on distributing post-28 June 2025 section 951A PTEP is now cumulative, so where the PTEP ordering rules permit, distributing earlier layer PTEP first is materially cheaper. Whether that sequencing is available in a given group depends on its PTEP composition, and it is worth modelling before year end. In separate news, the Office of Information and Regulatory Affairs completed its review of proposed section 250 regulations on foreign derived deduction eligible income and net CFC tested income on 5 August 2026, so release is imminent.

United States. A White House proclamation issued 6 August 2026 imposes minimum import prices and additional Section 232 duties on polysilicon and derivatives, effective for entries on or after 4 December 2026. The minimum prices are USD 21 per kilogram for polysilicon, USD 100 per kilogram for ingots and wafers, USD 0.22 per watt for solar cells and USD 0.38 per watt for solar modules, with an additional 15 per cent ad valorem duty on ingots and specified derivatives. Importers may evidence at entry that the first arm's length sale in the United States will occur at or above the minimum price, failing which a specific tariff equal to the minimum price, or to the shortfall, applies. Importers submitting materially inaccurate documentation, and their affiliates, face a permanent prohibition on importing covered goods. The construct makes the first arm's length United States sale price a customs-determinative fact, which ties transfer pricing policy to customs certification more directly than the existing related party valuation rules require, and at the point of entry rather than on later review.

United States. Customs and Border Protection reported to the Court of International Trade on 4 August 2026 that approximately USD 100 billion of refunds of tariffs imposed under the International Emergency Economic Powers Act has been completed and certified, following the Supreme Court ruling of 20 February 2026 that the statute did not authorise the President to impose tariffs. As at 31 July 2026 approximately USD 128.68 billion had been accepted for processing and 17.69 million entries liquidated or reliquidated. Refunds of approximately USD 1.6 billion across 19,726 claims have not been transmitted because the importers concerned had not provided ACH account information. Any group that was importer of record into the United States during the IEEPA period should confirm both that its entries have been picked up for reliquidation and that its ACH banking details are lodged with Customs and Border Protection, and should consider the recognition and timing of the refund receivable and its interest component. Separately, the State of Oregon and 24 other states filed a complaint in the same court on 3 August 2026 seeking to vacate the Section 301 tariffs of 10 and 12.5 per cent that took effect on 24 July 2026.

Lithuania. Updated commentary dated 10 August 2026 applies the thin capitalisation rules to cash pooling, providing that cash pool financing may constitute controlled debt where the actual source of funding is a controlling group entity, and that year-end loan repayments may be disregarded where repayment and subsequent refinancing lack economic substance and are intended to reduce borrowed capital for the 4:1 ratio. Interest may be denied even where the ratio is not exceeded, where the arrangement is abusive rather than commercially motivated. The more favourable interpretation may also be applied to earlier tax periods that remain open for assessment, filing and audit. Updated CFC guidance dated 11 August 2026 confirms that where an Estonian company earns profits but does not distribute them, and therefore pays no corporate income tax for the period, its actual tax is treated as zero for the low-tax test, subject to the economic substance exemption.

Belgium and the European Union. Two preliminary ruling requests, Cases C-415/26 and C-416/26, were published in the Official Journal on 10 August 2026. They ask whether national legislation is compatible with the third subparagraph of article 4(1) of the Anti-Tax Avoidance Directive where the group interest limitation consolidates group EBITDAs perfectly but consolidates exceeding borrowing costs imperfectly, so that a group with no exceeding borrowing costs on a consolidated basis can still suffer a limitation because interest income sits in one member and interest expense in others, and whether that provision has direct effect. Groups with a treasury company in a Member State that has adopted the group consolidation option should check how that State consolidates exceeding borrowing costs, quantify any exposure, and consider whether protective filings for open years are warranted.

Egypt. Law No. 151 of 2026, published 28 July 2026 and effective 29 July 2026, reduces the general debt to equity ratio from 3:1 to 2:1, with a 4:1 ratio for unrelated party borrowing financing designated national infrastructure projects. The 90 per cent participation exemption is replaced with a full exemption for dividends received by a parent holding at least 25 per cent of capital or voting rights for at least two years or undertaking to do so. Non-residents disposing of unlisted shares must calculate and remit capital gains tax within 60 days.

Denmark. Updated guidance published 31 July 2026 confirms that claims for refunds of excess dividend withholding tax are subject to a five-year limitation period rather than the three-year period the Tax Agency had applied since 2016, and that eligible cases will be reopened automatically, with all relevant previously rejected cases expected to be reopened by the end of 2026. Four categories are covered, including claims relating to dividend tax withheld after 11 June 2021 that were rejected as time barred. Australian institutional investors and superannuation funds with Danish holdings should reconcile their portfolios against the categories rather than wait for the sweep.

Chile. Congress passed a comprehensive tax reform Bill on 4 August 2026, now awaiting Constitutional Court review. It reduces the first category corporate rate from 27 per cent to 23 per cent, phased from 2026 through 2029, unifies the Pro-Pyme and general rates, and restores full integration between corporate and final taxes by gradually eliminating the 35 per cent restitution obligation on first category credits between 2027 and 2029. A tax stability regime is introduced for investments of at least USD 50 million, granted by contract for 10 to 20 years, which is directly relevant to mining and energy investment.

The next wave of Top 1000 reviews is about to commence. The ATO has confirmed, in its regular dialogue with professional bodies, that the next wave of cases is due to commence in the coming weeks and that in-scope taxpayers will receive letters advising them. The new wave is described as a mix of taxpayers entering the population for the first time and a review of Top 1000 taxpayers who have had no ATO activity for four years. The reference to four years without ATO activity is a useful indicator of how the population is being refreshed, and groups that have had no ATO engagement for several years may wish to confirm their assurance documentation is current.

The agreed Justified Trust handover process is worth invoking. Concerns have been raised with the ATO about unclear communication when one team steps off a matter and another takes over, and about fewer warm handovers in recent Top 100 reviews. At the Large Business Stewardship Group meeting on 24 September 2020 the ATO advised it had developed a formal handover process, under which taxpayers experiencing a change in case officer should be offered a meeting to explain the change, introduce the new team, discuss concerns, identify the history and context to be retained, and agree how the transition will be managed. A group facing a mid-review personnel change can ask for that meeting by reference to the 2020 key messages.

Australia and Canada agree the mechanics of MLI arbitration. A Memorandum of Understanding on the implementation of Part VI of the Multilateral Convention was published on the ATO website on 6 August 2026. Part VI amends article 24 of the Australia and Canada double tax agreement of 21 May 1980 to allow mandatory binding arbitration where the two competent authorities have been unable to resolve a case under the mutual agreement procedure within two years. The MOU, entered into under article 24 as modified by articles 16 and 19(10) of the MLI, sets out how a case is submitted to arbitration, the minimum information required, the rules for appointing arbitrators, the process itself, and the confidentiality provisions. For groups with unresolved Australian and Canadian transfer pricing or permanent establishment positions, there is now an operable pathway rather than an in-principle one.

The Board of Taxation resumes its thin capitalisation review on 28 August 2026. A two-hour session with peak bodies will cover the practical and commercial impacts of the reforms, concerns about compliance costs, uncertainty and administration, and potential solutions that address those concerns while maintaining the integrity objectives of the regime. A detailed agenda has not yet been released. The issues professional bodies have said they will press include deductions being denied simply because a taxpayer cannot restructure or trace, tracing under the debt deduction creation rules and the third party debt test, the inability to access the third party debt test at all, and the interaction between transfer pricing and the new rules in relation to the quantum of debt. Members of those bodies have been asked to supply real examples ahead of the session, so a group with a concrete fact pattern has a route to put it in front of the Board.

Second tranche of the CGT and negative gearing reforms is open for comment until 21 August 2026. Treasury has released a further set of draft legislation supporting the reforms announced in the 2026-27 Budget. The package is a transition and integrity measure rather than the core reform. It extends the new CGT regime to attribution managed investment trusts and clarifies trust treatment, splits pre and post 1 July 2027 gains by deeming certain trust assets to be sold and immediately reacquired at the transition date, allows trustees to opt out of indexation where it gives beneficiaries no benefit, recognises deferred gains and losses only on a later deferral realisation event, preserves concessional treatment for qualifying new residential dwellings and affordable housing with the acquisition window extended from 12 to 24 months from the first occupancy certificate, and exempts genuine testamentary trusts, deceased estates and special disability trusts from the proposed 30 per cent minimum CGT tax. A third tranche is anticipated. For inbound investors holding Australian real property through managed investment trusts this sits directly alongside the foreign resident CGT reform discussed above, and the consultation window is one week from the date of this brief.

Local file relief for entities that do not lodge an income tax return. Updated ATO guidance published on 11 August 2026 confirms that certain country-by-country reporting entities that do not lodge an income tax return may be eligible for administrative relief from local file obligations for an income year. The conditions are that the entity is not the only CBC reporting entity in its group in Australia, whether as an entity or a permanent establishment, for the relevant period, and that it holds documentation supporting its eligibility not to lodge an income tax return and indicating which entity will fulfil the CBC report notification and master file obligations, or is otherwise exempt. An entity without a tax file number should also hold evidence that it is not required to have one. The relief applies automatically without an exemption request, but the documentation must be maintained and failure to do so can expose the entity to penalties on review.

An interim Decision Impact Statement raises a question about administering adverse decisions. In Department of Education v Commissioner of Taxation [2026] FCA 898 the Federal Court held that a salary loading allowance paid to Victorian teachers was neither part of the relevant notional earnings base nor ordinary time earnings for superannuation guarantee purposes. The Commissioner has appealed. The interim DIS states that the ATO will generally defer finalising OTE-related advice, objections and compliance matters pending the appeal, but that where a decision must be made, for example because a period of review will elapse, decisions will be consistent with the existing ATO view of the law, with recovery generally deferred. The Administrative Review Council's Statement of Position on agency implementation of court and tribunal decisions records that where an agency disagrees with a decision the lawful avenues are appeal and, where appropriate, legislative amendment, and that ignoring the decision is not one of them. The ATO's proposed administrative approach may attract further stakeholder scrutiny while the appeal is pending.

Most core Payday Super guidance has now been finalised. LCR 2026/1 addresses application and transitional provisions, including when contributions are deemed received; LCR 2026/2 addresses eligible contributions, covering ordinary time earnings, salary sacrifice amounts and the payments that must meet the seven business day timeframe; and LCR 2026/3 addresses the calculation and assessment of the superannuation guarantee charge, including shortfall, interest and administration components. Guidance on qualifying earnings remains in draft as LCR 2026/D1, with finalisation pending the appeal in Department of Education v Commissioner of Taxation [2026] FCA 898, so the classification of allowances is the open question rather than the mechanics. Separately, employers whose June 2026 quarter contributions were not received by employees' funds by 28 July 2026 must lodge a superannuation guarantee charge statement and pay the charge by 28 August 2026. Employers should apply the specific transitional rules in LCR 2026/1 to contributions made from 1 July 2026 rather than assuming the former quarterly late-payment treatment continues unchanged.

Corporate tax transparency data is open for correction. The ATO is reminding large corporate entities to review and, if necessary, correct the information that will be published in the 2023-24 Report of Entity Tax Information before its release. The published figures are frequently the basis of external commentary, so the review is worth doing properly rather than as a formality.

Third party real property reporting instrument remade ahead of sunset. The Taxation Administration (Change of Reporting Period for Third Party Reports on Real Property Transfers) Legislative Instrument 2026, registered as F2026L01047 on 10 August 2026, specifies the reporting period for third party reports by states and territories on transfers of real property, due under item 3 in section 396-55 of Schedule 1 to the Taxation Administration Act 1953, as each three month period ending 30 September, 31 December, 31 March and 30 June. It has the same substantive effect as the 2016 determination it replaces, which was repealed and would otherwise have sunset on 1 October 2026. Nothing changes operationally. What is worth noting is that the quarterly flow of state and territory revenue office data to the ATO has been preserved rather than allowed to lapse, which sits alongside the foreign resident CGT changes discussed above.

The foreign bribery statutory review is open until 10 September 2026. The Attorney-General initiated a review of the Crimes Legislation Amendment (Combatting Foreign Bribery) Act 2024 on 7 August 2026. That Act amended Division 70 of the Criminal Code, created the offence of failure of a body corporate to prevent foreign bribery by an associate, and amended section 26-52 of the Income Tax Assessment Act 1997, which denies a deduction for a bribe to a foreign public official. The panel will consider whether the amendments achieved their objectives in relation to deterrence, enforcement outcomes and corporate practices. Feedback is sought from businesses engaged in international activities.

Three decisions of note. In Laureti v Commissioner of Taxation [2026] FCA 1086, decided 10 August 2026, Perry J dismissed a taxpayer's summary judgment application in relation to administrative penalties of $5,735,998 imposed at 75 per cent for intentional disregard following default assessments under section 167 of the Income Tax Assessment Act 1936. Her Honour held the questions of construction were novel and important and unsuitable for summary determination, and that the application sought to circumvent the taxpayer's onus of proving the assessments excessive. The Commissioner was given the opportunity to amend the appeal statement to specify the taxation law said to have been intentionally disregarded. In Hasan v Commissioner of Taxation [2026] FCA 1072, decided 7 August 2026, Derrington J set aside a Tribunal decision and remitted the matter to the Tribunal for redetermination, notwithstanding that the taxpayers had not shown the Commissioner's decisions were wrongly made. The Tribunal had mischaracterised section 43 of the A New Tax System (Family Assistance) Act 1999 as creating a liability rather than conferring eligibility, and that error was material to its reasoning on whether parents owed a contractual liability to the service. The Court found no error in the Tribunal's derivation analysis, in penalties at 50 per cent for recklessness, or in its conclusion that the safe harbour in subsection 284-75(6) of Schedule 1 to the Taxation Administration Act 1953 did not apply where operational and regulatory information had not been given to the tax agent. In Commissioner of Taxation v KYWNY [2026] ARTA 1551, decided 7 August 2026, the Tribunal held it has jurisdiction under section 14ZZ of the Taxation Administration Act 1953 to review GST assessments where the taxpayer claims the refunds resulted from identity theft, on the basis that a taxpayer contending an assessment is otherwise incorrect, rather than excessive, is capable of being dissatisfied, and that a claim of identity theft is sufficient for jurisdiction to arise.

Three separate relief mechanics appeared this week and none of them relieves the whole obligation. Belgium extended a notification deadline without extending the filing deadline. The Netherlands suspended penalties without suspending interest. Barbados waived the sanction without moving the statutory date. The practical consequence is that a group's tracker needs to distinguish registration, notification, filing and payment by jurisdiction rather than carry a single date per country. The nearest live date remains the Dutch top-up tax return on 31 August 2026, which the Dutch penalty holiday does not move. Two rows, the Hong Kong and United States consultations, are related dates rather than Pillar Two obligations, and are included because they compete for the same team's time.