The Modernisation of Tax Administration Systems (MTAS) is a multi-phased ATO wide strategy aimed at improving the integrity of the tax system by working with Trustees, Tax Practitioners, and Digital Service Providers (DSPs) to improve the quality, accuracy and transparency of trust and beneficiary data.
Phase 2 will deliver enhancements to trust and beneficiary reporting over the next 2 years.
This MTAS Phase 2 working group meeting was held 1 December 2025 at 2.00 pm AEDT.
Key Outcomes
Below is a summary of key outcomes. Note: the full outcomes and any presentation materials are available in the Online services for DSPs.
Project update
ATO advised the capital losses label in the Statement of distribution will be retained, and an additional rebateable reduction label for capital gains will be added, with the necessary approvals for reformatting secured.
Review draft specifications and validation rules updates
A walkthrough of the draft specifications, validation rules and artefacts for the 2026 MTAS changes was provided.
Three new trust return labels were introduced with detailed technical changes documented:
- Non-PP Managed investment scheme amount B1
- Franked distribution related to investments amount U2
- Other assessable foreign source income from a financial investment amount H1.
The addition and deletion of validation rules to accommodate MTAS changes were explained, and feedback was invited.
Updated code packages will be released in EVTE for testing in the December release.
Interactive validations
The proposed interactive validations for trust tax returns in 2027 were outlined.
Three main types of interactive validations were identified, with the overall objective being to enhance data integrity and compliance:
- improving data quality (e.g. trustee details)
- influencing related fields (e.g. beneficiary assessment code)
- supporting compliance (e.g. carry forward losses, family trust elections).
The group discussed the distinction between validation errors and warnings, privacy considerations, and implementation challenges.
Pre-fill for non-individuals
A discussion on the design options, use cases, and target audiences for a non-individual pre-fill service for trust beneficiary income, including timing, technical delivery, and applicability to different trust structures was held.
Feedback was sought on preferences and technical implications on three possible approaches:
- a generic non-individual pre-fill service
- a service based on income data type
- services aligned to specific non-individual return types.
Understanding the preferred prefill experience, including service granularity, will be an important step to moving forward with API services.
Nudge messaging for non-individuals
Three nudge messaging options for providing prompts about trust distribution income were provided for DSP feedback:
- using a profile compare service
- including a trust income attribute in the pre-fill message
- building checks into the validation/lodgment process.
Use of BBRP instead of SRP for Trust Tax Return services (TT27)
DSPs were advised of the proposal to transition Trust Tax Return Service lodgments to use Bulk and Batch Request processing (BBRP) instead of Single Request Processor (SRP), due to the MTAS Phase 2 program changes providing richer validations against internal ATO systems.
ATO is pursuing multiple options for continued usage of SRP, DSPs were asked to share any concerns re the possible transition.
Further discussion will occur via an out‑of‑session focus group and the fortnightly PLS working group to capture DSP input.
Forward plan
Upcoming engagement will focus on the announced law reform regarding mandatory TFN reporting for closely held trusts, along with user experience improvements and supporting the transition from external processes to in-system solutions for trusts with over 200 beneficiaries.
Next steps and wrap up
The group anticipate reconvening in late January to continue discussions on MTAS Phase 2.
For any questions about the MTAS Phase 2 working group, raise a ticket via the DSP service desk in Online services for DSPs.
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