2017 Budget Australian Business and Taxpayer measures
TAX INTEGRITY MEASURES
- The multinational anti-avoidance law (MAAL) will be amended to prevent the use of foreign trusts and partnerships in corporate structures for tax minimisation, with retrospective effect from 1 January 2016.
- Federal Government to pass Law to ensure Hybrid mismatch rules used by banks to minimise tax in cross border transactions will not defeat current taxing measures and will be prohibited 1 January 2018.
- Federal Government to provide $28.2m to the ATO to target serious and organised crime in the tax system.
- Sales suppression technology and software, used to understate business income by deleting electronic transactions, will be prohibited.
- The Black Economy Taskforce will have recommendations within their interim report to the Federal Government accepted and set down for immediate action.
- Funding for the ATO’s Black Economy Taskforce audit and compliance activities will be extended until 30 June 2018.
- The taxable payments reporting system will be extended to contractors in the courier and cleaning industries from 1 July 2018.
- From 1 July 2018 Purchasers of new residential properties or new subdivisions will be required to remit the GST directly to the ATO at settlement (practical impact will be that the Tax Commissioner will gain priority in relation to settlement funds over creditors such as banks)
- The GST treatment of digital currency (such as Bitcoin) will be aligned with that of money from 1 July 2017
BUSINESS & SMALL BUSINESS MEASURES
- Businesses that employ foreign workers on certain skilled visas will be required to pay a levy that will provide revenue for a new Skilling Australians effective March 2018
- Businesses with a turnover of less than $10m per annum:
− $1,200 for employees on temporary skill shortage visas per year
− $3,000 upfront for each employee on a permanent work visa
- Businesses with a turnover of more than $10m per annum
− $1,800 for employees on temporary skill shortage visas per year
− $5,000 upfront for each employee on a permanent work visa
- Access to the small business CGT concessions will be strengthened to ensure eligibility for assets are related to the small business.
- The $20,000 instant asset write-off for small business will be extended by 12 months to 30 June 2018
- The extended timeline asset write-off for small business will be extended to those with an aggregated annual turnover of less than $10m.
- No change in personal income tax rates
- The temporary budget repair levy of 2% (as currently legislated) expires 1 July 2017
- Medicare levy will be increased from 2.0% to 2.5% of taxable income effective 1 July 2019.
- Tax rates that are linked to the top personal tax rate, such as the fringe benefits tax rate, will also be increased.
- Medicare levy low-income thresholds for singles, families, and seniors and pensioners will increase effective this fiscal year.
- A new set of repayment thresholds and rates for the higher education loan program (HELP) will take effect 1 July 2018.
- Deductions for travel expenses related to inspecting, maintaining or collecting rent for a residential rental property will be disallowed – Effective 1 July 2017.
- Plant and equipment depreciation deductions will be limited to outlays actually incurred by investors in residential real estate properties (will only apply to the original purchaser) – Effective 1 July 2017.
- Foreign and temporary tax residents will be denied access to the CGT main residence exemption on their Australian property.
- Foreign resident CGT withholding rate will be increased from 10% to 12.5% and will apply to Australian real property and related interests valued at $750,000 or more (formally $2,000,000).
- Annual levy of at least $5,000 will be imposed on foreign owners of under-utilised residential property (vacant property assets – i.e. not occupied or available for rent for at least 6 months per year).
- 50% cap on foreign ownership in new developments will be introduced through a condition on new dwelling exemption certificates.
- The principal asset test contained within Div. 855 of the Income Tax Assessment Act 1997 will be applied on an associate inclusive basis to foreign tax residents with indirect interests in Australian real property.
- A person aged 65 or over can contribute up to $300,000 from the proceeds of the sale of their home as a non-concessional contribution into superannuation – Effective 1 July 2018. Existing contribution and asset restrictions will not apply. To be eligible the principal place of residence must be held for a minimum of 10 years
- Limited recourse borrowing arrangements will be included in a member’s total superannuation balance and transfer balance cap effective 1 July 2017.
FIRST HOME SUPER SAVER SCHEME
- Voluntary contributions can be made from 1 July 2017 wherein Individuals may contribute $15,000 per year ($30,000 in total) within existing superannuation caps
- Effective 1 July 2018, these voluntary contributions and associated earnings can be withdrawn for first home deposit
- Contributions and earnings will be taxed at 15% and draw-downs will be taxed at marginal rates less a 30% offset
OTHER REVENUE MEASURES
- Major bank levy will apply to authorised deposit taking institutions (ADIs), with licensed entity liabilities of at least $100b, from 1 July 2017.
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