There was a time when we would spend hours every Budget night modelling the tax and super changes to help our clients understand what they mean for themselves and their businesses… but last night we all got a very early night.
I know we all were interested in the fact that diplomatic and consular representations of Bhutan would get GST refunds now and the Australia and Iceland Double Taxation Agreement would be legislated, but apart from these changes, these are the new tax and super changes in this budget… don’t get to excited…
Improving the integrity of off-market share buy-backs for listed companies
The Government has announced in the Budget it will align the tax treatment of off-market share buy-backs undertaken by listed public companies with the treatment of on-market share buy-backs.
No self-assess of the effective life of intangible depreciating assets
The Government has announced it will not proceed with the measure to allow taxpayers to self-assess the effective life of intangible depreciating assets.
Australian Women Donors Network and Australians for Indigenous Constitutional Recognition listed deductible gift recipients
The Government will list Australians for Indigenous Constitutional Recognition and the Australian Women Donors Network as DGRs.
Unlegislated tax and superannuation measures
The Government has announced it will not proceed with the following tax and superannuation measures announced by the previous Government:
- The proposed changes to 3 year rather than one tear annual audit requirement for self-managed superannuation funds.
- The proposed limit of $10,000 for cash payments made to businesses for goods and services.
More funding for the ATO and the Tax Practitioners Board
The Budget does spend some more money to assist the ATO and the Tax Practitioners Board on implementing the legislation. These include funding of:
- $80 million to the ATO to extend the Personal Income Taxation Compliance Program for 2 years, looking at the overclaiming of deductions and incorrect reporting of income, and raising $670 million in extra tax.
- Continued funding to the ATO to extend the Shadow Economy Program.
- $200 million per year to the ATO for the Tax Avoidance Taskforce, increasing tax collected by $2.8 billion .
- $30.4 million to the Tax Practitioners Board to increase compliance investigations into tax practitioners who engage in poor and unlawful tax advice, increasing tax collected by $81.9 million.
Multinational tax changes
The final “announcement” was some more information on the multinational tax changes that was announced in the election campaign. These include:
- Change the thin capitalisation regime by replacing the safe harbour and worldwide gearing tests with earnings-based tests to limit debt deductions in line with an entity’s activities.
- An anti-avoidance rule to prevent significant global entities from claiming tax deductions for payments made directly or indirectly to related parties in relation to intangibles held in low- or no-tax jurisdictions.
- Tenderers for Australian Government contracts worth more than $200,000 to disclose their country of tax domicile
- Australian public companies (listed and unlisted) will need to disclose information on the number of subsidiaries and their country of tax domicile
And that is it… But this does mean:
- No more low and middle income tax offset from 1 July 2022.
- We still are expecting the stage 3 tax cuts from 1 July 2024.
- The last year we can claim the carry back tax losses is the 2023 year.
- Temporary full expensing ends on 30 June 2023
On the temporary full expensing, hopefully something will be announced in the May budget next year, or the threshold will drop to $1,000 on 1 July 2023… Ouch