How ATO Taxation Ruling 2026/2 works and will technology firms appeal
· Australian Financial ReviewRichard Holden and , Mimi Zou
Sep 22, 2026 – 10.56am
On September 4, the Australian Tax Office issued a ruling with major implications for the digital economy – especially for, and including, Australian businesses involved in the distribution of foreign cloud computing, software, and streaming services supplied by companies such as Google, Amazon, Microsoft, and Netflix. Under the ruling, many payments flowing offshore could be treated as royalties and subject to withholding tax rates of 5 per cent to 30 per cent.
The ruling may raise additional revenue, but it carries a raft of risks, including uncertainty for existing contracts and incompatibility with Australia’s tax treaties.
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Richard HoldenEconomics professorRichard Holden is vice-chancellor’s professor and chief societal economist at UNSW. Connect with Richard on Twitter.
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