Since Federal Parliament finished its Autumn session on Friday 31 March 2017, very little has happened on the legislative front. However new or progressed Commonwealth revenue measures since TaxTalk Monthly: April include the following:
· PAYG Withholding variation for foreign resident capital gains withholding payments - income tax exempt entities varies to nil the amount that would otherwise have to be paid to the Commissioner of Taxation for foreign resident capital gains tax under section 14-200 of Schedule 1 of the Taxation Administration Act 1953, when certain acquisitions of taxable Australian property from income tax exempt entities occur.
The following Bills have received Royal Assent:
· The Treasury Laws Amendment (Combating Multinational Tax Avoidance) Bill 2017 which increases administrative penalties for significant global entities and updates Australia's transfer pricing rule for references to the latest OECD guidelines, and together with the Diverted Profits Tax Bill 2017 implement the Diverted Profits Tax.
· Treasury Laws Amendment (2017 Measures No 1) Bill 2017, which makes minor technical changes to the tax concessions applicable to early stage investment and venture capital investments, and allows the Australian Securities and Investments Commission to share confidential information with the ATO.
· Treasury Laws Amendment (2016 Measures No 1) Bill 2016, which amends the Corporations Act 2001 to improve disclosure for Employee Share Schemes, and adds six organisations to the list of deductible gift recipients.
In addition, the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016 passed the Senate with several changes that have the effect of limiting the proposed phased-in corporate tax rate reduction to companies with aggregated turnover of less than AUD$50 million. Specifically, the Bill as currently amended will result in the following:
· The corporate tax rate for small business entities (with aggregated turnover of less than AUD $10 million) will be reduced to 27.5 per cent for the 2016-17 income year and subsequently extended to the following corporate tax entities:
– for the 2017-18 income year - those with aggregated turnover of less than AUD$25 million, and
– for the 2018-19 income year and later income years - those with aggregated turnover of less than AUD$50 million.
· The 27.5 per cent rate for corporate tax entities with aggregated turnover of up to AUD$50 million will subsequently be cut to:
– 27 per cent for the 2024-25 income year,
– 26 per cent for the 2025-26 income year, and
– 25 per cent for the 2026-27 and later income years.
The Bill must return to the House of Representatives for these amendments to be agreed before it can receive Royal Assent. However, in the interim in accordance with the Treasurer's statement and media release, the ATO will be administering the tax changes in accordance with the Bill that has passed the Senate. Refer to the TaxTalk Alert on 28 April 2017.
Federal Parliament commences the Winter sitting on Tuesday 9 May 2017, which is also the day of the 2017-18 Federal Budget.