As part of the Modernisation of Tax Administration Systems (MTAS) program, we're updating our administration systems to increase efficiency and deliver better outcomes for the community.
Nicholas Bell shares how the MTAS program will roll out over the coming years.
What do we mean by modernising tax administration?
Our modernisation program is focused on trusts, and delivering 3 key objectives:
- Streamlining the lodgment experience.
- Improving the quality, accuracy and integrity of trust and beneficiary reporting.
- Better targeting of compliance and assurance activities.
Delivering on these objectives will build greater confidence in the tax system by making it easier for trusts and beneficiaries to meet their tax obligations and reducing unnecessary compliance interactions and processing delays.
Our modernisation program is being delivered in a phased approach. Tax Time 2024 saw the introduction of the Trust income schedule to help all beneficiaries understand their income entitlements and new capital gains labels that support more accurate calculations for capital gains.
Over the next few years, additional enhancements will deliver an even better experience for trustees, beneficiaries, and tax agents.
Tax Time 2026 – laying the foundations
From 1 July 2026, we'll use trust statement of distribution data to pre-fill income tax returns for individual beneficiaries.
This change will enhance the lodgment experience by making it easier for taxpayers to report their trust income accurately while improving the integrity of beneficiary reporting.
Tax agents will benefit from improved data quality that will support:
- greater visibility of trust distributions for their clients
- improved validations for digitally-lodged trust tax returns that will reduce errors and processing delays.
Tax Time 2027 – building for the future
In Tax Time 2027, we'll build on these foundations to introduce new features that will make the lodgment experience easier than ever. Tax agents and their clients should be preparing now to ensure that they have the records they need to report correctly and meet their obligations.
For the first time, we'll expand pre-fill to non-individual entities, giving tax agents access to trust distribution data as lodgments occur, further improving the integrity of trust and beneficiary reporting.
We'll introduce interactive validations that will:
- check information in the trust tax return against ATO-held data
- identify errors for correction as part of the lodgment process.
This will enable agents to 'get it right first time' and reduce the need for further interactions with us.
We'll also address a historical pain point by removing limitations on the number of beneficiaries that can be included in electronic lodgment software. Agents representing larger trusts (more than 200 beneficiaries) will no longer be required to lodge trust tax returns and statements of distribution separately.
Expanding our online service offering
We're also working to deliver a new online lodgment option in Online services for business to support trusts with simple reporting obligations. Self-preparer trusts will also benefit from interactive validations, making it easier for them to complete and lodge returns.
Need more information?
Our focus on improving the quality, accuracy and integrity of data will deliver significant benefits to trusts, beneficiaries, and tax agents. Trusts will be able to lodge with increased confidence, beneficiaries will enjoy reliable pre-fill, and tax agents will benefit from greater visibility and enhanced lodgment support.
You’ll find more details about these changes on our website at ato.gov.au/mtas. We'll continue to update this page as our modernisation program progresses.
We'll communicate additional information on how you can prepare for these changes, including updated resources and instructions, ahead of tax time each year.
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