Key budget takeaways for agents, accountants
Economy
10 May 2023
A rundown of the main points, focusing on what matters to the tax profession.
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.
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 instalments 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
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- $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.
Technology
- Scrapping the patent box regime that was yet to be legislated. The patent box regime was intended to provide a concessional tax rate for income derived from patents in the medical and biotechnology sectors.
- $101.2m over five years from 2022-23 to support businesses to integrate quantum and AI technologies into their operations.
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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