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Key takeaways
- Start date of the previously announced measure to strengthen the foreign resident CGT regime to be deferred (and no other changes announced).
- No other multinational tax measures announced.
Since last year’s Federal Budget, the Government has progressed and implemented key components of its multinational tax agenda, including the new thin capitalisation and debt deduction creation measures, public country by country reporting and Australia’s global and domestic minimum taxes (Pillar Two). Additionally, many Australian businesses have been grappling with the evolving global trade landscape and impacts on supply chain and tariffs.
In this 2025-26 Federal Budget there were no announcements of changes that affect multinational taxation. However, there was a deferral of last year’s Budget measure to strengthen the foreign resident capital gains tax regime. There was also additional funding for the Tax Avoidance Taskforce to support the ATO’s continued compliance scrutiny of multinationals and other large taxpayers.
Deferring proposed changes to Australia’s foreign resident capital gain tax regime
In last year’s 2024-25 Federal Budget the Government announced that the foreign resident capital gains tax (CGT) regime would be amended to:
- clarify and broaden the types of assets on which foreign residents are subject to CGT to ensure assets with a close economic connection to Australian land and/or natural resources are appropriately captured in addition to Australian real property, indirect Australian real property interests (IARPI) (i.e. shares and other membership interests in entities that predominantly hold Australian real property) and assets used in an Australian permanent establishment
- amend the point-in-time principal asset test, which is relevant to working out whether membership interests are IARPI, to a 365-day testing period, and
- require foreign residents disposing of shares and other membership interests exceeding $20m in value to notify the ATO prior to the transaction being executed.
In this year’s Federal Budget, the Government has announced the start date for these measures will be deferred from the originally proposed 1 July 2025 to the later of 1 October 2025 or the first 1 January, 1 April, 1 July or 1 October after the amending Act receives Royal Assent. This will enable affected taxpayers to better plan and understand the details of the proposal which have not been finalised.
For further details on these changes, refer to our previous Tax Alert.
Excise support for the hospitality sector and alcohol producers
As announced before the Budget, the Government will freeze indexation on draught beer excise and excise-equivalent customs duty for two years from the next indexation date of August 2025.
Extending additional tariffs on goods from Russia and Belarus
The Government will extend the application of an additional 35% tariff on goods imported from Russia and Belarus for a further two years, through to 24 October 2027. This measure prevents goods originating from Russia or Belarus from accessing ‘Most Favoured Nation’ status on importation into Australia.
Luke Bugden
Paul Cornick
Christina Sahyoun
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