At a Glance
- New Professional Standards: Strict new laws for tax agents (TPB Determination 2024) are now fully operative, requiring agents to report false statements and disclose historical sanctions.
- Residency Rules: Proposed “Bright Line” residency tests are not yet law. The earliest likely start date is 1 July 2026.
- Superannuation Win: The controversial tax on “unrealised gains” for super balances over $3m (Division 296) has been scrapped in favour of a realised earnings model, deferred to 1 July 2026.
The Australian tax landscape is currently navigating two distinct waves of reform. For expatriates and investors, it is critical to distinguish between the strict new professional conduct rules that are now law and the major tax residency overhauls that remain proposals.
Confusing a “bill” with an “act” can lead to significant compliance risks. This guide clarifies the new obligations enforced by the Tax Practitioners Board (TPB) and provides an accurate status update on the proposed changes to individual tax residency and superannuation taxation.
1. The New Reality: Strict TPB Compliance Rules (Enacted)
As of late 2025, the regulatory framework for tax practitioners has fundamentally changed. The Tax Agent Services (Code of Professional Conduct) Determination 2024 is fully operative. These are not guidelines; they are strict legal obligations designed to restore integrity to the tax system.
What Has Changed for You and Your Agent?
The new Determination introduces specific obligations that fundamentally alter the accountant-client relationship. Two are particularly relevant for our clients:
1. False or Misleading Statements (Section 15)
Tax agents now have a strict duty regarding statements made to the Australian Taxation Office (ATO). If a client insists on a position that is materially false or misleading—such as claiming non-residency based on rules that haven’t passed yet—the agent is legally obligated to refuse.
- Mandatory Withdrawal: If a false or misleading statement results from recklessness or intentional disregard of the law, the agent must withdraw from the engagement.
- Notification Duty: In these specific cases of recklessness, the agent may be legally required to notify the TPB or the ATO, overriding standard confidentiality protocols.
2. Keeping Clients Informed (Section 45)
Agents must disclose any “relevant matter” that could significantly influence a client’s decision to engage them.
- Retrospective Disclosure: This obligation covers matters arising as far back as 1 July 2022.
- Transparency: This ensures you know if your agent has been subject to sanctions, guaranteeing you are partnering with a “fit and proper” professional.
The Impact: At AIM S Australia, we adhere strictly to these new standards. This ensures that the advice you receive is not just strategic, but fully compliant with the heightened scrutiny of the federal regulator.
2. The Horizon: Proposed Tax Residency Overhaul (Not Yet Law)
While professional standards have tightened, the rules determining who is an Australian tax resident remain subject to legislative delay.
The Board of Taxation’s proposed “Bright Line” residency framework is NOT yet law. Until legislation is passed and receives Royal Assent, the existing “Resides Test” (based on common law and TR 2023/1) remains the primary test.
Status of the Proposals (As of November 2025)
Current Treasury updates suggest these measures, if enacted, would likely not commence until 1 July 2026 at the earliest.
The “Adhesive Residency” Trap
The most significant risk in the proposed legislation is for long-term residents (those resident for 3+ years) attempting to leave Australia.
The Proposed “Overseas Employment Rule”:
To cease residency immediately under the proposal, you would need to:
- Undertake overseas employment for more than 2 years;
- Have accommodation available at the place of employment; and
- Spend less than 45 days in Australia in each income year of the deployment.
The Risk:
If you fail this test (e.g., by returning to Australia for 46 days), you fall into the “3-Year Lock-In.” You would remain an Australian tax resident until you have spent less than 45 days in Australia for three consecutive years.
Warning: Do not plan your departure based solely on these proposals. Under current law, the “Domicile Test” and establishing a “Permanent Place of Abode” overseas remain the critical factors.
3. Other Key Tax Measures: Crucial Updates
Division 296 Tax (Superannuation) – Significantly Revamped
The proposed tax on superannuation balances exceeding $3 million has undergone major changes following industry consultation.
- New Start Date: The measure has been deferred to 1 July 2026.
- Removal of “Unrealised Gains”: In a major policy shift announced in October 2025, the Government confirmed that unrealised gains will be excluded from the tax calculation. The tax will now apply only to realised
Strategic Note: This removes the liquidity risk previously feared by Self-Managed Super Funds (SMSFs) holding large illiquid assets (such as property), as tax will not be payable on asset appreciation until the asset is sold.
Foreign Resident Capital Gains Tax
Proposals to strengthen the CGT regime for foreign residents—specifically broadening the tax base to include assets with a “close economic connection” to Australian land—have also been deferred.
- New Start Date: The measures will commence no earlier than 1 October 2025 (or following Royal Assent).
The Verdict
Certainty is key. While the compliance environment for your tax agent is now stricter than ever, the tax rules for residency and superannuation remain in a transitional phase. Do not plan your departure or repatriation based solely on the “Bright Line” proposals.
At AIM S Australia, we navigate you through the current laws while monitoring the legislative pipeline to future-proof your strategy. This approach includes rectifying historical compliance issues before they escalate.
Whether you require assistance with Multiple Overdue Tax Returns or Complex Late Tax Filing for Expats and Non-residents, our team ensures your tax history is brought up to date, mitigating risk and establishing a clean slate for the future.
Contact AIM S Australia Tax Accountants today to bring your tax affairs up to date.
About the Author
Nika Widanage FCPA is the Managing Partner of AIM S Australia Tax Accountants. A Registered Tax Agent holding a Master’s degree from Monash University, she specialises in high-net-worth expatriates on individual tax residency and cross-border taxation. Her practice focuses on risk mitigation, ATO compliance, and the voluntary disclosure process.
Nika’s industry leadership was recognised as the winner of Financial Controller of the Year at the 2025 Corporate Accountant Awards and as a dual finalist for both Partner of the Year (Boutique Firm) and Public Accountant of the Year in the 2024 Australian Accounting Awards.
General Professional Disclaimer
This publication contains general information and commentary for guidance purposes only. It is intended to provide a high-level overview of complex taxation issues and does not constitute personalised tax, financial, investment, or legal advice.
Specifically, this guide does not constitute advice regarding the suitability or timing of asset purchases, investments (including SMSF-related assets or property gearing), or the determination of specific claimable quantum for your unique financial position. The information, including references to statutory rates, penalties, ATO policy, and legislation (such as the General Interest Charge or Failure to Lodge penalties), is based on current prevailing law at the time of publication and is inherently subject to change without notice.
No reader should act, or refrain from acting, on the basis of this material without seeking specific, tailored professional advice concerning their individual circumstances. We strongly advise that you consult a registered tax agent for a formal assessment of your unique tax and financial position.
The use of this content does not create an accountant-client relationship with Nika Widanage or AIM S Australia Pty Ltd.
Liability limited by a scheme approved under Professional Standards Legislation.
As part of our commitment to professional excellence and connecting businesses with the right expertise, AIM S Australia is proud to be recognized on DesignRush, a leading B2B marketplace for professional agencies.