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Key budget takeaways for agents, accountants
09 May 2023
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10 minute read
The Budget has delivered some small relief measures for individuals and small business and also boosted funding for a tougher compliance crackdown of tax evaders.
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Small business
- A temporary increase in the instant asset write-off threshold to $20,000 for one year from 1 July 2023.
- An amendment to the tax law to set the GDP adjustment factor for pay as you go (PAYG) and GST installments at 6 per cent for the 2023–24 income year.
- No renewal of the loss carry back tax offset and the SME technology investment boost.
Funding boost for compliance programs
- $90 million in funding to the ATO and $1.2 million to Treasury to extend the Personal Income Tax Compliance Program for two years from 1 July 2025 and expand its scope from 1 July 2023.
- A four-year extension of the GST compliance program which will see the ATO provided with $588.8 million to conduct a range of activities to promote GST compliance. The extended funding will assist the ATO to develop more sophisticated analytical tools to combat emerging risks to the GST system.
- Expanding the scope of the general anti-avoidance rules for income tax. Part IVA will be expanded to include schemes that reduce tax paid in Australia by accessing a lower withholding tax rate on income paid to foreign residents and schemes that achieve an Australian income tax benefit, even where the dominant purpose was to reduce foreign income tax.
- Additional funding to facilitate ATO engagement with taxpayers with high-value debts over $100,000 and aged debts older than two years. This will apply to taxpayers that are either public and multinational groups with an aggregated turnover of greater than $10 million, or privately owned groups or individuals controlling over $5 million of net wealth.
Superannuation
- Treasury has reduced the severity of the factor-based approach for SMSFs under the non-arm's length income (NALI) provisions. Under the new proposal, income will be taxable at twice the level of the general expense where there is a breach, instead of five times as previously proposed.
- Fund income taxable as NALI will also exclude contributions.
- Revenue estimates for the $3 million threshold tax for super remain around $2.3 billion, suggesting that the government will proceed with its plan to tax unrealised gains.
- Confirmation of move to payday super.
Multinationals
- The government will implement a 15 per cent global minimum tax for large multinational enterprises to help prevent a “race to the bottom” on corporate tax rates, and protect Australia’s corporate tax base.
- The global minimum tax rules would allow Australia to apply a top up tax on a resident multinational parent or subsidiary company where the group’s income is taxed below 15 per cent overseas.
- The government will also look to apply a 15 per cent domestic minimum tax applying to income years starting on or after 1 January 2024.
- Amendments to the Petroleum Resource Rent Tax (PRRT) in response to Treasury’s Review of the PRRT Gas Transfer Pricing (GTP) arrangements.
Medicare levy changes
- An exemption from the Medicare levy for eligible lump sum payments in arrears for low-income taxpayers.
- An increase in the Medicare levy low-income thresholds for singles, families and seniors and pensioners from 1 July 2022.
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