Set out below is an overview of major Income Tax Legislation changes effective to 1 January 2018, extracted from the Australian Income Tax Legislation 2018 – 3 Volume Set.
Tax and Superannuation Laws Amendment (2016 Measures No 2) Act 2017
(No 15 of 2017, assented to 28 February 2017 and effective from 1 March 2017)
- The Act makes amendments to establish a remedial power for the Commissioner of Taxation to allow for a more timely resolution of certain unforeseen or unintended outcomes in the taxation laws.
- The Act also allows primary producers to access income tax averaging 10 income years after choosing to opt out, instead of that choice being permanent.
Diverted Profits Tax Act 2017
(No 21 of 2017, assented to 4 April 2017 and effective from 1 July 2017)
This new Act imposes a diverted profits tax (DPT) at the rate of 40%. The DPT aims to ensure that the tax paid by significant global entities properly reflects the economic substance of their activities in Australia. It also encourages significant global entities to provide sufficient information to the Commissioner to allow for the timely resolution of tax disputes.
Treasury Laws Amendment (Combating Multinational Tax Avoidance) Act 2017
(No 27 of 2017, assented to 4 April 2017 and effective from 1 July 2017)
The Act makes amendments to introduce a new diverted profits tax, and to update Australia’s transfer pricing rules.
Treasury Laws Amendment (Enterprise Tax Plan) Act 2017
(No 41 of 2017, assented to 19 May 2017 and effective from 1 July 2016)
- The Act makes amendments to increase the small business income tax offset to 16 per cent of an eligible individual’s basic income tax liability that relates to their total net small business income from the 2026/27 income year;
- The Act also increases the aggregated turnover threshold for access to most small business tax concessions to $10 million and makes consequential amendments to reflect the reduction in the corporate tax rate.
Treasury Laws Amendment (Accelerated Depreciation For Small Business Entities) Act 2017
(No 56 of 2017, assented to 22 June 2017 and effective from 1 July 2017)
The Act makes amendments to extend by 12 months to 30 June 2018 the period during which small business entities can access expanded accelerated depreciation rules.
Major Bank Levy Act 2017
(No 63 of 2017, assented to 23 June 2017 and effective from 24 June 2017)
The new Act impose a levy on certain banks, as was proposed in the 2017 Federal Budget. The Act introduces the major bank levy on authorised deposit-taking institutions (ADIs) with total liabilities greater than $100b. This threshold will be indexed to grow in line with nominal GDP. The amount of the levy payable by the ADI for the quarter is 0.015% of the applicable liabilities amount for the quarter in relation to the ADI.
Treasury Laws Amendment (Major Bank Levy) Act 2017
(No 64 of 2017, assented to 23 June 2017 and effective from 24 June 2017)
The Act makes amendments to specify certain administrative features relating to the major bank levy, including the requirement that the levy is payable to the Commissioner quarterly.
Treasury Laws Amendment (2017 Measures No 4) Act 2017
(No 94 of 2017, assented to 23 August 2017 and effective from 1 October 2017)
The Act makes amendments to provide asset roll-over relief for mandatory transfers within a superannuation fund in the transition to a MySuper product.
Treasury Laws Amendment (Housing Tax Integrity) Act 2017
(No 126 of 2017, assented to 30 November 2017 and effective from 1 January 2018)
- The Act makes amendments to ensure that travel expenditure incurred in gaining or producing assessable income from residential premises is not deductible and not recognised in the cost base of the property for CGT purposes,
- The Act also denies income tax deductions for the decline in value of ‘previously used’ depreciating assets used in gaining or producing assessable income from the use of residential premises for the purposes of residential accommodation.
Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No 1) Act 2017
(No 132 of 2017, assented to 13 December 2017 and effective from 1 January 2018)
- The Act makes amendments to allow an individual to use the proceeds in relation to the sale of their main residence to make downsizer contributions of up to $300,000 to their superannuation provider if they are 65 years of age or over.
The Act also makes amendments to enable first home savers to make voluntary contributions into the superannuation system and to withdraw those contributions and associated earnings for the purposes of purchasing their first home.
The Australian Income Tax Legislation 2018 – 3 Volume Set three-volume set provides a comprehensive consolidation of Australian income tax and related legislation, updated and consolidated for all amendments to 1 January 2018. It incorporates detailed history notes for all substantive amendments in the last six years, a legislation annotator, index and conversion tables between the 1997 and 1936 income tax assessment Acts.