1. New code obligations
Tax practitioners with more than 100 employees started off the year needing to comply with eight additional obligations under the Tax Practitioners Board’s Code of Professional Conduct. From 1 July 2025, the new Code kicks in for tax firms with 100 or fewer employees.
IPA Senior Tax Advisor Tony Greco says the new obligations were pared back significantly from their original form to something more ‘manageable’. A case in point is the controversial false and misleading statements obligation that requires practitioners to report a client who is intentionally contravening the law to the ATO or TPB.
“They’ve moved the threshold up substantially, so it shouldn’t happen too often,” Greco says.
“If you’ve got one of those bad apple clients who ignores compliance with the law, and you’ve told them and they insist on not complying and harm will be done, your hand is forced. You will have to dob the client in.”
IPA Tax and Super Advisor Letty Chen says the obligation only relates to the specific entity making the false or misleading statement, which could result in some tricky discussions with clients operating multiple entities.
“Many of our practitioners work with family groups. How do you cut off a company but retain a working relationship with the rest of the group?” she asks.
“You need to have very robust processes in place, so if it does get to that stage, you know what you need to do.”
Chen recommends using IPA templates for quality management manuals and engagement letters available on the IPA portal, to ensure compliance with the new Code. The engagement letter templates are being updated and will be posted on the portal soon.
2. Property sale certificates
From 1 January 2025, the Foreign resident capital gains withholding (FRCGW) regime that applies to property sales changed in two key ways. The withholding rate increased from 12.5% to 15%, and the requirement for the value of the property to be $750,000 or more has been scrapped.
As a result, all sellers of property who are Australian tax residents must now provide purchasers with a clearance certificate from the ATO if they want to avoid the purchaser withholding 15% and paying it to the ATO.
There are two timing issues to be aware of, says Chen. The changes apply to contract dates not settlement dates, and the clearance certificate is required by settlement. Obtaining one should only take a few days, but the ATO has flagged it could take up to 28 days.
“The certificates are valid for 12 months. If your client is thinking about selling, encourage them to get a certificate as soon as possible and hold onto it. They’re free and nothing adverse happens if they don’t sell the property and don’t use it,” Chen says.
For foreign residents who cannot avoid the withholding tax, Chen says practitioners can apply for a downwards variation of the 15% rate if the client has capital losses or is eligible for a CGT exemption.
3. Superannuation changes
For the fifth year in a row, the super guarantee rate increases by 0.5%, this time to 12% on 1 July 2025. The good news is that there are no further changes flagged at this stage.
Also from 1 July 2025, the government will pay 12% super on government-funded Parental Leave Pay. A lump sum payment, including interest, will be paid by the ATO to the person’s nominated super fund after the end of each financial year.
Greco says if employers are paying more than 12% super, they could be liable to fork out the difference.
4. Wage theft criminalised
From 1 January 2025, intentionally underpaying an employee’s wages or entitlements is now a criminal offence.
The Fair Work Ombudsman won’t refer a small business for prosecution if the business complies with the Voluntary Small Business Wage Compliance Code, which is full of practical tips, Chen says. Civil action can still be taken under the Fair Work Act, however.
“Many of our practitioners work with family groups. How do you cut off a company but retain a working relationship with the rest of the group?”
Letty Chen, Tax and Super Advisor, Institute of Public Accountants
5. Election-dependent changes
30% tax on super balances over $3 million
Greco says the bill is finding resistance in the Senate. “We hope [the bill] gets dropped. You’re taxing the value of an asset at a point in time before the person has realised it. It’s a nasty feature,” he says.
Small business instant asset write-off of $20,000
The government has flagged the temporary $20,000 write off will be continued for 2024/25, but it is not yet law. The Coalition and Greens want the amount increased to $30,000. As the law currently stands, the write off amount from 1 July 2024 is $1,000. “This should be law,” Greco says. “Small business wants to know they’re going to get the deduction so they can build it into their cash flow forecast.”
Interest on tax debt no longer deductible
The government introduced a bill in November 2025 to make the general interest charge and shortfall interest charge non-deductible from 1 July 2025, however it too remains in limbo. “We are campaigning against it,” says Chen. “The rates are very high for lending costs, and it will further penalise taxpayers who make an honest mistake.”
The IPA and the Canberra Business Chamber will hold the 2025 Pre Federal Election Insights online event on 26 March 2025, From 7:30am to 8:30am. Key Government, Opposition, and Independent leaders will go head-to-head on the policies shaping small businesses, industries, and individuals. More details on registration here.
IPA Group CEO Andrew Conway will join regulators, top legal minds, international AML and accounting compliance experts at AML Edge 2025. They will examine the upcoming tranche 2 AML/CTF reforms, including risk assessments, client due diligence and reporting obligations at the event held at Watersedge, Sydney on 27 March. Visit here to register and find out more.
