Commonwealth revenue measures introduced into Parliament since the last issue of TaxTalk include:
- Treasury Laws Amendment (Making Sure Foreign Nationals Pay Their Fair Share of Tax and Other Measures) Bill 2018, which was introduced into the House of Representatives on 20 September 2018, proposes a package of reforms to improve the integrity of the income tax law for arrangements involving stapled structures and to limit access to tax concessions for foreign investors by:
- increasing the Managed Investment Trust (MIT) withholding rate on fund payments that are attributable to non-concessional MIT income to 30 per cent.
- modifying the thin capitalisation rules to prevent double gearing structures
- limiting the withholding tax exemption for superannuation funds for foreign residents, and
- codifying and limiting the scope of the sovereign immunity tax exemption.
- Income Tax Rates Amendment (Sovereign Entities) Bill 2018, which was introduced into the House of Representatives on 20 September 2018, supports the above Bill and proposes consequential amendments to specify that sovereign entities are liable to income tax on taxable income at a rate of 30 per cent, unless another provision applies to set a different rate.
- Income Tax (Managed Investment Trust Withholding Tax) Amendment Bill 2018, which was introduced into the House of Representatives on 20 September 2018, makes consequential amendments to specify that the MIT withholding rate on income attributable to non-concessional MIT income is 30 per cent.
- Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2018, which was introduced into the House of Representatives on 20 September 2018, proposes a broad range of tax related amendments that were announced in the 2018-19 Federal Budget, including:
- amendments to the thin capitalisation rules to require the alignment of the value of assets for thin capitalisation purposes with the value included in financial statements and ensure that foreign controlled Australian tax consolidated groups and multiple entry consolidated groups that have foreign investments or operations are treated as both outward investing and inward investing entities.
- extending the definition of significant global entity and introduce the narrower concept of “country-by-country reporting entity”
- the targeting the Research and Development (R&D) Incentive
- amendments to the GST Act to ensure that offshore suppliers of rights or options to use commercial accommodation in Australia include these supplies in working out their GST turnover, and
- removal of the liability for luxury car tax from cars that are re-imported following service, repair or refurbishment overseas.
- Treasury Laws Amendment (Black Economy Taskforce Measures No 2) Bill 2018, which was introduced into the House of Representatives on 20 September 2018, seeks to implement the Government’s responses to the Black Economy Taskforce’s final report which relate to denying deductions for certain non-compliant PAYG withholding payments, extending the Taxable Payment Reporting System and taxing tobacco at the time of manufacture (in conjunction with Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018, which proposes to amend the Excise Acts and the Taxation Administration Act 1953 to address and clarify the consequences of the principal changes set out in the main Bill).
- Treasury Laws Amendment (2018 Measures No. 5) Bill 2018, which was introduced into the House of Representatives on 20 September 2018, proposes, among other things, to make technical amendments to the MIT and attribution managed investment trust (AMIT) rules, update the list of specifically listed deductible gift recipients (DGRs), and extend DGR status to entities promoting indigenous languages.
The following regulations have been remade which seek to improve the previous issued (and sunsetted) regulations by repealing redundant provisions, simplifying language, and restructuring provisions for ease of navigation. None of the changes are not intended to affect the substantive meaning or operation of the provisions:
- Fringe Benefits Tax Assessment Regulations 2018
- Pooled Development Funds Regulations 2018
- Superannuation Guarantee (Administration) Regulations 2018
- Taxation (Interest on Overpayments and Early Payments) Regulations 2018
Other Commonwealth revenue measures registered as legislative instruments or regulations since the last issue of TaxTalk include:
- Corporations (Passport) Rules 2018 incorporate the Asia Region Funds Passport Rules, agreed by the participating economies in Annex 3 to the Memorandum of Cooperation on the Establishment and Implementation of the Asia Region Funds Passport, into Australian law.
- Corporations Amendment (Asia Region Funds Passport) Commencement Proclamation 2018 fixes 18 September 2018 as the day on which Schedules 1, 2, 2A and 3 of the Corporations Amendment (Asia Region Funds Passport) Act 2018 commence.
- Corporations Amendment (Asia Region Funds Passport) Regulations 2018 make amendments to the Corporations Regulations 2001 and other miscellaneous regulations which are needed to implement the Asia Region Funds Passport in Australia. This includes amendments to update the particulars that are included on ASIC’s registers and ensure that the disclosure requirements for foreign passport funds products are the same as those that currently apply to managed investment products.
- Foreign States Immunities (Taxation) Regulations 2018 enables relevant Australian Commonwealth, State and Territory agencies to enforce tax laws against foreign states by bringing a civil action in the event that a foreign state does not fulfil its obligations under a prescribed tax law. The regulation repeals the Foreign States Immunities Regulations 1987 (Cth).
- Treasury Laws Amendment (Illicit Tobacco Offences) Regulations 2018 prescribe how to work out the amount of duty that would be payable on an amount of tobacco leaf for offences relating to illicit tobacco.
The following key Bills have completed their passage through Parliament:
- Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018 extends the period during which small business entities can access accelerated depreciation for assets costing less than AUD 20,000 until 30 June 2019. See also the Government’s media release.
- The Medicare Levy Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018 together with the Private Health Insurance Legislation Amendment Bill 2018 and A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018, increase the maximum voluntary excess levels for private health insurance products providing individuals an exemption from the Medicare levy surcharge.
- Treasury Laws Amendment (Supporting Australian Farmers) Bill 2018, which was introduced into the Parliament on 13 September 2018, allows primary producers to immediately deduct (rather than claim depreciation over three years) the cost of fodder storage assets, such as silos and hay sheds, used to store grain and other animal feed, that are first used or installed ready for use on or after 19 August 2018. Treasury Laws Amendment (Tax lntegrity and Other Measures) Bill 2018, which includes the previously announced integrity measure to apply to the small business capital gains tax concessions, amendments to ensure that the Multinational Antiavoidance Law (MAAL) can apply to arrangements involving trusts and partnerships, and measures to ensure that the venture capital tax concessions apply to fintech investments. During the Bill’s passage through Parliament, amendments were made to change the start date for the small business concession integrity measure to apply from 8 February 2018 (instead of 1 July 2017) and to ensure that there is an impact assessment of the operation of the venture capital tax concession within two years of enactment.