The proposed change to the corporate tax rate is probably the biggest non-superannuation announcement in the budget – however it has a 10 year implementation phase.

The minor change to the individual marginal tax rate is worth $315 annually to those being affected.

Other changes are relatively minor and have start dates of between one and two years away.

Having said that we feel it is useful that you have a summary of the main announcements made in the 2016-17 Federal Budget.

Measures proposed in the budget are subject to the government being re-elected, legislation being drafted and then parliamentary debate before becoming law.

 

Area

Changes

Effective
From

Superannuation Substantial changes have been announced in the superannuation area.

 

Click here for to read the Changes to Superannuation Bulletin.

Small Business The tax rate for a company that satisfies the small business test will be reduced from 28.5% to 27.5% and the turnover threshold will be increased from $2million to $10million. 1 June 2016
Company tax rates The tax rate for a all companies will be reduced to 25% over the next decade progressively bringing all companies, regardless of annual turnover, onto the lower rates. Progressively
Small Business The 5% tax discount  introduced for individual taxpayers with business income from an unincorporated business if it satisfies the small business test increased to 8% on 1 July 2016 and progressively increased to 16%. However it is still capped at $1,000. 1 June 2016
Early Stage investor incentives CGT exemption on shares held between 12 months and 10 years.

Refine the definition of a start-up

1 July 2015
Division 7A loan arrangements Implement a number of the recommendations to the operation of Division 7A made by the Board of Taxation 1 July 2018
Personal Change the tax scales. The 37% marginal tax rate will apply from $87,000 rather than the current level of $80,000. 1 July 2016
Personal The freeze in indexing the thresholds for Medicare levy surcharge and the private health fund insurance rebate will continue for three years from 1 July 2018.
Personal The low income threshold for the Medicare levy and surcharge   and the private health fund rebate will increase. From the 2015-2016 income year
Look through collective investment vehicles Allow two new types of collective investment vehicles that are treated as partnerships (i.e. look though) for tax purposes. Progressively from 1 July 2017
GST An overseas supplier that has an Australian turnover of $75,000 or more will be required to be registered for GST. That supplier will collect GST on its sales and remit the GST to the Tax Office. Needs unanimous agreement of States and Territory governments
GST GST reporting for a small business will be simplified. 1 July 2017
GST GST will be extended to low value goods imported by consumers. 1 July 2017
Multinational profit shifting A 40% tax on the profits of multinational corporations that are artificially diverted from Australia. 1 July 2017
Transfer Pricing Transfer pricing rules will be further amended to give effect to OECD recommendations. 1 July 2016
 

For any queries regarding the taxation aspects of the Budget please contact us on 02 9232 5111