For a quick summary of the more pertinent points from the Federal Budget, please see below. If you would like a more in-depth read, please refer to the Wolters Kluwer CCH Federal Budget Report 2016.
- Increased flexibility to claim a tax deduction for personal superannuation contributions.
- Changes to Transition to Retirement Income Streams.
- Work test abolished for those aged 65 to 74.
- Changes to concessional superannuation contributions.
- Catch-up concessional contributions allowed.
- Lifetime non-concessional superannuation contributions cap.
- $1.6M superannuation transfer balance cap.
- Low Income Superannuation Contributions re-invented.
- Removal of the superannuation anti-detriment payment.
- A Tax Avoidance Taskforce will be established within the ATO to undertake enhanced compliance activities targeting multinationals, large public and private groups, and high-wealth individuals.
- Individuals who disclose information on tax avoidance to the ATO will receive stronger protection under the law from 1 July 2018.
- The government is encouraging all companies to adopt the Tax Transparency Code (TTC) from the 2016 financial year.
- The operation of the Australian Public Service including the ATO will be reviewed to achieve efficiencies and manage their transformation to a more modern public sector.
GST and Other Indirect Taxes
- GST will be extended to low value goods imported by consumers from 1 July 2017.
- A discussion paper on the “double taxation” of digital currencies under the GST regime has been released.
- Tobacco excise and excise-equivalent customs duties will be subject to four annual increases of 12.5% from 1 September 2017.
- The wine equalisation tax (WET) rebate cap will be reduced to $350,000 on 1 July 2017 and to $290,000 on 1 July 2018.
- The excise refund scheme will be extended to domestic distilleries and producers of low strength fermented beverages such as non-traditional cider from 1 July 2017.
- Access to refunds under the Indirect Tax Concession Scheme has been granted or extended to diplomats and consuls from Cyprus, Estonia and Finland as well as the Organisation for the Prohibition of Chemical Weapons.
Individuals and Families
- The threshold at which the 37% marginal tax rate for individuals commences will increase from taxable incomes of $80,000 to $87,000 from 1 July 2016.
- The low-income thresholds for the Medicare levy and surcharge will increase from the 2015/16 income year.
- The pause in the indexation of the income thresholds for the Medicare levy surcharge and the private health insurance rebate will continue for a further three years from 1 July 2018.
- Income tax exemptions will be provided for ADF personnel deployed in Afghanistan, the Middle East and in international waters.
- Six organisations have been added to the list of specifically-listed deductible gift recipients.
- Turnover threshold increases to $10M.
- Company tax rate reduced to 25%.
- Unincorporated small business tax discount increase.
- Division 7A compliance simplified.
It is important to note that, dependent upon the legislation that gets passed through Parliament, some or even all of the proposals presented in the Federal Budget may change or be dropped. As such, you don't need to do anything right now other than give us a call if you would like to talk through your specific circumstances.