On 12 May 2015, the Treasurer Mr Hockey handed down the 2015-16 Federal Budget, his 2nd Budget. The Budget Papers predict a deficit of $35bn next year, down to a $6.9bn deficit in another 3 years’ time in 2018-19.
From a taxation point of view, the Budget contained some significant changes, although “big ticket” tax reform measures remain for consideration in the Tax Reform White Paper.
The major revenue measures announced in the Budget included:
- A cut of 1.5% in the company tax rate for small businesses (turnover less than $2m). This will take the rate for them to 28.5%.
- A 5% tax discount for unincorporated small businesses.
- Small businesses will be able to write off in one year assets valued at up to $20,000 each.
- Multinational enterprises face new “integrity” rules via amendments to Pt IVA.
- Significantly, the Government announced that Australia will move ahead of and outside the OECD/G20 BEPS project.
- Govternment to implement OECD new transfer pricing documentation standards from 1 Jan 2016.
- Stronger penalties for MNE tax avoidance.
- A GST “Netflix” tax will be applied to certain offshore intangible supplies from 1 July 2017.
- Work-related car expenses to be simplified – 2 methods will be discontinued, and only one flat rate of 66c/km will apply.
- FBT concessions for charities and NFPs re meal and entertainment expenses will be capped at $5,000pa.
This is your last chance to sign up for your free Thomson Reuters special Federal Budget night report! Completed by our team of tax experts during the Federal Budget media lock-up it features in-depth analysis of the measures outlined by the Treasurer.
Please note that if you are a current subscriber to Weekly Tax Bulletin you will automatically receive the report.