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In this edition of our Australian International Tax Update, we summarise recent significant Australian tax developments, examine their practical impact, and outline actions that multinational groups, foreign investors, private equity funds and international advisers should consider.

Explore tax strategies to manage labour, fuel, import and cash flow pressures in construction.

Fuel tax credits update covering ATO scrutiny, compliance risks and rate changes.

Loss carry back Australia 2026 helps companies turn tax losses into refunds and improve cash flow.

Explore how the Federal Budget 2026–27 reshapes M&A in Australia, with CGT changes, trust tax reforms and implications for deal structuring and transaction timing.

In this episode of Beyond the Numbers with Grant Thornton, Corporate and International Tax Partner Vince Tropiano unpacks the changes one week on, covering what was announced, key structuring considerations and, most importantly, why a conversation with your adviser to model potential implications is the best place to start.

Proposed changes to discretionary trust taxation in the 2026–27 Federal Budget could drive restructures – but stamp duty risks may be significant. Explore key considerations before transferring assets.

Foreign resident CGT reforms expand taxable Australian real property, withholding and renewables discount.

The ATO’s draft PCG 2026/D1 introduces a new compliance framework for attributing risk weighted assets to Australian branches of foreign banks, reshaping thin capitalisation methodologies and documentation expectations.

Australia’s new thin capitalisation rules significantly impact businesses with foreign ownership or offshore operations. If your business has debt deductions (such as interest deductions and borrowing costs) of more than A$2m, tax deductions could be denied under the primary ‘earnings tests’ (particularly if your EBITDA is low or negative due to early-stage losses, especially common in sectors like infrastructure and technology). To manage the above risk, the legislation offers an alternative test: the Third Party Debt Test (TPDT).

On 24 September 2025, the ATO released PCG 2025/3 (‘the PCG’), setting out its compliance approach to arrangements where capital is raised to fund franked distributions. This was after their consultation on the draft PCG.

Australia’s Country-by-Country (“CbC”) reporting regime has evolved significantly in recent years, reflecting a broader global shift towards tax transparency