RSM Australia

Progress of 2018 budget measures

How will the federal Budget impact SMEs

Progress of 2018 budget measures

 

Measure

Summary

Date of Effect

Status

Innovation

R&D tax incentive changes

Significant changes to the calculation of the R&D tax incentive which aims to benefit companies who have a larger degree of R&D activities. 

1 July 2019

Measure deferred

Property

Vacant land tax – limiting deductions

Tax deductions denied for expenses associated with holding vacant residential or commercial land.  Does not extend to land used in carrying on a business.

1 July 2019

Exposure Draft

Superannuation

New retiree contributions

Work test requirement will be removed for retirees (over 65) the first year they don’t meet the test requirements, if they have a balance less than $300,000. 

1 January 2019

Enacted

Increased maximum membership of SMSFs

Maximum Self-Managed Superannuation Funds (SMSFs) membership increased from four to six.
 

1 July 2019

Bill introduced

Yearly SMSF audit

The annual audit requirement for SMSFs will be changed to a three-yearly requirement for SMSFs with a history of good record keeping and compliance.

1 July 2019

Consultation Paper

Contributions from multiple employers

Individuals whose income exceeds $263,157, and have multiple employers, will be able to nominate that their wages from certain employers are not subject to the superannuation guarantee (SG).

1 July 2019

Bill introduced

Corporations

Thin capitalisation

Various changes to thin capitalisation provisions, including the alignment of asset values to financial statements and change in investor classifications. 

1 July 2019

Bill introduced

Indirect Taxes

GST extended to offshore hotel accommodation sellers

Change to calculation of GST turnover by offshore online sellers of hotel accommodation which will increase the chances of exceeding the GST registration threshold.

 

1 July 2019

Bill introduced

International

SGE definition expanded

Definition of Significant Global Entity (SGE) expanded to include members of large multinational groups owned by private companies, trusts and partnerships with global turnover greater than $1 billion.

1 July 2019

Bill introduced

Reduced withholding tax rate for MITs

Residents of countries that have entered into an Exchange of Information with Australia will have withholding tax reduced to 15% for certain distributions from Managed Investment Trusts (MIT).

1 January 2019

Bill introduced

New tax for foreign digital businesses

New tax proposed on foreign digital businesses.  The new tax would be between 3-6%.

 

N/A

Measure deferred

 

Small to Medium Sized Businesses

$20,000 asset write off extended

Instant write off for capital purchases not exceeding $20,000 extended by 12 months until 30 June 2019. (Revised in 2019 Budget)

 

1 July 2018

Enacted

Treatment of UPEs

Division 7A will be amended to clarify the circumstances in which it applies to Unpaid Present Entitlements (UPE). 

1 July 2019

Consultation Paper

Deductions for wages and contractors may be denied

Businesses will no longer be able to claim deductions for payments to their employees or certain payments to contractors where they have not met their PAYG obligations.

 

1 January 2019

Enacted

Individuals

Personal income tax plan

Various changes to individual tax brackets and introduction of tax offsets for low-to-middle income earners.(Revised in 2019 Budget)

1 July 2018 onwards

Enacted

Superannuation fee protection measures

Various changes to restrict fees and other costs on low-balance superannuation accounts. 

13 March 2019

Enacted

Circular trust distributions to Family Trusts

Integrity provision to prevent Family Trusts from deferring income through ’round robin‘ distributions. 

1 July 2019

Exposure Draft

Removing CGT discount for MITs and AMITs

MITs and Attribution MITs (AMIT) will be unable to apply the 50% Capital Gains Tax (CGT) discount at the trust level.

 

N/A

No further update


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