In the latest PwC Tax Briefing, Clementine Thompson and Patricia Muscat led a comprehensive session on pivotal tax developments in Australia, capturing the attention of finance, tax, legal and workforce professionals. The briefing set the stage for an in-depth exploration of employment tax, country by country (CBC) reporting, and dispute resolution updates.
Patricia Muscat provided insights into recent Australian tax developments, noting a subdued start to the year due to the impending Federal Election. She discussed new legislative instruments, including the final rules for Pillar Two, specific countries for public CBC reporting, and affordable dwelling requirements to access build-to-rent tax concessions. Patricia also highlighted:
- the enactment of new law to introduce production tax credits for hydrogen and critical minerals, set to commence in 2027, and an announcement of a new green aluminium production tax credit
- the release of the 2025 Reportable Tax Position Schedule instructions
- announced changes to tax penalties and R&D tax incentive as part of the Mid-Year Economic and Fiscal Outlook for 2024-25, and
- the latest OECD updates.
PwC’s global survey on tax controversy and dispute resolution revealed a surge in tax inquiries from tax authorities, driven by the sophisticated use of data analytics and automation. This survey, which included 825 businesses worldwide, highlighted that every respondent had been involved in some type of tax dispute in the past two years. The findings underscored the growing complexity and frequency of tax inquiries, with corporate, transaction, and international taxes being the primary focus areas. Ashani Samuel-Thambiah delved into the global survey’s findings, which revealed that 71% of businesses experienced increased inquiries, with 43% of these inquiries leading to disputes. The duration of tax disputes in Australia, particularly in transfer pricing and international tax, was noted to be longer than the global average.
Employment Taxes were another key topic for this tax briefing, with updates on fringe benefits tax (FBT), superannuation contributions, and payroll taxes. The ATO’s focus on education over audits for FBT was highlighted, along with changes to FBT compliance, including alternative recordkeeping and a safe harbor rate for electric vehicles. The briefing also addressed the impact of recent case law on contractors for payroll tax purposes, common mistakes employers make with respect to superannuation guarantee compliance, and the upcoming move to ‘Payday Super’.
The session concluded with a discussion on the new comprehensive short form local file for CBC reporting, which demands extensive data disclosures and reporting on significant restructures. The challenges of gathering upstream information and potential duplication with other disclosures were emphasised, along with the need for strategic planning and engagement to meet these new requirements.