Author: Michael Chow, Chief Editor of the Australian Master Tax Guide: Tax Year End Edition – 59th Edition
To celebrate the release of the CCH Books: Tax Year End Catalogue, our specialists are penning a series of articles to give you insight into the top changes taking effect in the taxation landscape.
Set out below is a general overview of tax and accounting highlights.
SMALL BUSINESSES AND START-UPS
- The tax rate for small companies (ie. those with aggregated turnover of less than $2m) is reduced from 30% to 28.5%.
- Individuals who run a small business or are assessable on a share of income from a small business (not being a company) are entitled to a tax offset of 5% of the tax payable, up to $1,000 per income year.
- Small businesses can immediately deduct blackhole expenditure incurred when starting up a business, including government fees and charges as well as costs associated with raising capital.
- The employee share scheme rules have been amended to provide a specific concession for employees of certain small start-up companies when acquiring shares or rights in their employer or a holding company of their employer on or after 1 July 2015.
- A new provision in the general anti-avoidance rules in Pt IVA will counter tax avoidance by multinational entities.
- Administrative penalties will be doubled for significant global entities entering into tax avoidance and profit shifting schemes.
- The one-third of actual car expenses method and the 12% of original value method of arbitrarily substantiating car expenses has been removed and the cents-per-kilometre method has been modified by the introduction of a uniform, 66 cents per km rate.
- The period over which in-house software expenditure can be deducted (including pooled expenditure) has increased from four to five years.
- The income threshold for dependent tax offset purposes has been reduced from $150,000 to $100,000.
FRINGE BENEFITS TAX
- For the FBT year commencing 1 April 2015, the FBT rate is 49%.
MANAGED INVESTMENT TRUSTS
- A new tax regime for managed investment trusts applies to assessments for income years starting from 1 July 2016.
CAPITAL GAINS TAX
- Where a vendor sells taxable Australian property with a market value of $2m or more, the purchaser will have to make a capital gains foreign resident withholding of 10% from the sale price, unless the vendor has a clearance certificate from the ATO.
- Investors in Australian early stage innovation companies are provided with a tax offset and a CGT exemption for their investments. These amendments apply to shares issued from 1 July 2016.
- CGT roll-over is available for small businesses that change their legal structure from 2016/17.
FRINGE BENEFITS TAX
- The FBT exemption for work-related portable electronic devices has been relaxed for small business from the 2016/17 FBT year.
- Reportable fringe benefits will include salary packaged meal entertainment benefits and entertainment facility leasing expense benefits.
- New rules limit the FBT concessions for salary packaged entertainment benefits for employees of certain not-for-profits.
The new Australian Master Tax Guide: Tax Year End Edition – 59th Edition will cover all of these changes and more, providing the technical depth, practical guidance and answers you can always rely on.