RSM Australia

A look at the 2015/16 Budget - which measures were enacted?

A number of announcements from the 2015/16 Budget remain unenacted, with many of these announced measures yet to be introduced into Parliament as bills.  The link below lists the taxation measures that:

  • have been passed and have become law;
  • have been introduced into Parliament; and
  • are yet to be introduced into Parliament.

Whilst the Coalition Government passed most of its major 2015/16 Budget announcements, its lack of success in implementation of other measures reflects the tough environment in which they have had to operate, including dealing with an often hostile Senate, and internal party frictions.

On the understanding that the Coalition will now request a double dissolution of Parliament, previously announced Budget measures that have been introduced into Parliament will lapse.  The fate of these measures, along with those measures for which bills have not yet been drafted, remain uncertain.  This will cause concern for measures that are intended to apply from the date of announcement, or for which the proposed start date has already passed, as business and tax advisers alike will remain in the dark as to whether the Government will in fact proceed with these measures at a later time.

With “legislation by announcement” being a feature of modern politics, having a backlog of unenacted taxation measures is a frustrating, but common occurrence. When elected in 2013, the Coalition Government inherited some 92 announced but unenacted measures, and should be commended for the prompt action taken in 2013 to clear this backlog.

Advisers and business owners are hoping that whichever party is elected to Government in July 2016, these prior year measures will be dealt with as swiftly as the Coalition Government did with the measures they inherited in 2013.

Progress of Selected Measures Announced in 2015/16 Budget

Measure

Summary

Start Date

Status

Changes to work-related car expense deductions

“12% of original value method” and “one-third of actual expenses method” removed.

 
Rate for “cents per kilometre method” set at 66 cents/km for all motor vehicles. Future year rates to be set by the Commissioner.

No changes to “logbook method”.
 

1 July 2015

Enacted

Changes to tax residency rules for temporary working holiday makers

“Backpacker tax” aimed at treating most people who are temporarily in Australia for a working holiday as non-residents for tax purposes. This removes access to the tax-free threshold and low marginal rates of tax for these taxpayer.

1 July 2016

Not introduced into Parliament – subject to ongoing consultation

Medicare levy low-income thresholds (2015)

Annual threshold increases for application of Medicare Levy

1 July 2014

Enacted

Zone tax offset changes

Amendments to exclude “fly-in fly-out” and “drive-in drive-out” workers from accessing the zone rebate where their normal residence is not within a “zone”.

1 July 2015

Enacted

Child care system reforms

A new Child Care Subsidy will be introduced from 1 July 2017 to replace the existing Child Care Benefit and Child Care Rebate. Measures are designed to support families where both parents work.

1 July 2017

 

Introduced, but bill lapsed

Accessing parental leave pay from both employer and government

Removal of ability for individuals to receive benefits from both the government Parental Leave Pay scheme, and employer provided parental leave schemes.

1 July 2016

Introduced, but bill lapsed

Multinational anti-avoidance provisions

Multinational entities with global revenue of $1b or more subject to stricter rules on using artificial arrangements to avoid tax in Australia

1 January 2016

Enacted

Penalty rules for large multinational groups

Increase in maximum administrative penalties that can be imposed on large companies entering into tax avoidance and profit shifting schemes.

1 July 2015

Enacted

Transfer pricing documentation changes

The OECD’s new transfer pricing documentation standards will be implemented from 1 January 2016 for companies with a global revenue of $1b or more.

1 January 2016

Enacted

Other multinational tax avoidance measures

Board of Taxation will consult on implementation of OECD draft plan to tackle problem of multinationals claiming a tax deduction in one country but not paying tax in another.

No date specified

Announced

Company tax rate cut

Reduction of tax rate from 30% to 28.5% for companies with an aggregated annual turnover of less than $2m.

1 July 2015

Enacted

Small business tax discount

Individual taxpayers with business income from an unincorporated business with less than $2m annual turnover entitled to tax discount of 5% capped at $1,000 per individual for each income year.

1 July 2015

Enacted

Instant asset write-off threshold

Instant asset write-off threshold will be increased from $1,000 to $20,000 for assets acquired and installed ready for use between 7.30 pm (AEST) 12 May 2015 and 30 June 2017.

12 May 2015 7.30PM

Enacted

Business establishment expenses

An immediate deduction will be available for professional expenses associated with starting a new business.  Previously only eligible for five year write-off.

1 July 2015

Enacted

CGT relief for small business restructures

Small businesses with an aggregated annual turnover of less than $2m may obtain CGT relief where they change the legal structure of their business.

1 July 2016

Enacted

FBT exemption for portable electronic devices

Small businesses with an aggregated annual turnover of less than $2m may get an exemption where they provide their employees with more than one qualifying work-related portable electronic device per year.

1 April 2016

Enacted

FBT: meal and entertainment for not-for-profit employees

The Government has introduced a single grossed-up cap of $5,000 to salary packaged meal entertainment and entertainment facility leasing expenses provided to employees of FBT rebatable and exempt employers.

The Government also announced that all such salary packaged entertainment provided from 1 April 2016 would also potentially be reportable and included in employee payment summaries.

As such, FBT rebatable and exempt employers will be required to use the ‘actual method’ to work out the amount of salary packaged meal entertainment or entertainment facility leasing expenses subject to FBT (i.e. the 50:50 method cannot be used).  Historically there has been no cap for these benefits.

1 April 2016

Enacted

GST on offshore supplies of services and intangibles

“Netflix tax” aimed at ensuring supplies of services and intangibles provided to Australian consumers by offshore providers will be subject to GST.

1 July 2017

Introduced, but bill lapsed

Accelerated depreciation for primary producers

An immediate deduction for capital expenditure on fencing and water facilities such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills is available for primary producers.

Capital expenditure on fodder storage assets used to store grain and other animal feed will be deductible over three years.

12 May 2015 – 7.30PM

Enacted

Employee share schemes (ESS) amendments

Technical amendments to ESS concessions for eligible start-up companies, including:

  • exclusion of eligible venture capital investments from turnover test and grouping rules for access to concessions
  • extending access to 50% CGT discount, by aggregating holding period for options that are converted into shares where shares subsequently sold
  • Granting Commissioner discretion to disregard three year minimum holding period rule in certain circumstances

 

1 July 2015

Enacted