17 May, 2015
The Abbott Government has unveiled the 2015-16 Budget, unveiling a $5.5 billion package driven by tax breaks, concessions and immediate tax write-offs aiming to support the nation’s 2 million-plus small businesses.
My brief understanding of some of the most directly relevant items is summarised as follows. If anyone has a different view of my understanding, I would be pleased to hear.
SMALL BUSINESS
Tax cuts - Small businesses (turnover under $2.00 M) will receive a 1.5 per cent tax cut from 1 July, 2015 with unincorporated businesses, including sole traders and partnerships, will see a 5 per cent tax discount up to $1,000.
Immediate Deductibility - Small businesses will be able to immediately deduct the costs of purchase (new or used) of a single asset up to $20,000, though depreciation regulations do continue apply for certain assets. An immediate write-off will not be on offer for some assets, including in-house software and horticultural plants.
Start Ups - Start ups will be able to claim an immediate deduction for professional expenses associated with starting a business from the 2015/16 income year.
Primary Producers - Primary producers will be able to claim accelerated depreciation for water facilities, fodder storage and fencing from 1 July 2016.
FBT - The fringe benefits tax exemption for portable electronic devices used primarily for work purposes will be expanded from 1 April 2016.
INTERNATIONAL BUSINESS
Multinational profit shifting and international - A multinational anti‐avoidance law will be introduced into the general anti‐avoidance provisions of the Income Tax Assessment Act.
The maximum administrative penalties for companies that enter into tax avoidance and profit shifting will be doubled.The increased penalties are aimed at helping deterdeter tax avoidance and will apply for income years commencing on or after 1 July 2015.
In the same context, new transfer pricing documentation standards will be implemented from 1 January 2016. The proposed measures have the potential to significantly extend the scope of Australia's taxing rights over multinational enterprises
INDIVIDUALS AND FAMILIES
From 1 July 2016, the tax residency rules will be changed to treat most people who are temporarily in Australia for a working holiday as non‐residents for tax purposes, regardless of how long they are here.
The Medicare levy low‐income thresholds for singles, families and single seniors and pensioners will be increased from the 2014/15 income year.
Child Care and Support - Where both parents work, and subject to a defined activity test, a new Child Care Subsidy will be introduced from 1 July 2017. The government will provide an additional $3.2b over five years from 2014/15 to support families with child care so they can move into work, stay in work, train, study or undertake other recognised activities. Families with annual incomes up to $60,000 will be eligible for a subsidy of 85% of the actual fee paid, up to an hourly fee cap. The subsidy reduces to 50% for eligible families with annual incomes of $165,000. The Child Care Subsidy will have no annual cap for families with annual incomes below $180,000. For families with annual incomes of $180,000 and above, the Child Care Subsidy will be capped at $10,000 per child per year.
Where families do not meet activity test requirements, a Child Care Safety Net comprising 24 hours subsidised child care per fortnight will be available.
Parental Leave Pay - From 1 July 2016, the ability for individuals to access government assistance for Parental Leave Pay (PLP), in addition to any employer will be removed
I would be interested to hear budget views from others.
