Accelerated depreciation for primary producers
From 1 July 2016 primary producers will be able to immediately deduct capital expenditure on fencing and water facilities (such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills) and depreciate over three years all capital expenditure on fodder storage assets (such as silos and tanks used to store grain and other animal feed).
Immediate deduction for professional expenses
From the 2015/16 income year businesses will be able to immediately deduct a range of professional expenses associated with starting a new business; including legal and accounting advice on establishing a company, trust or partnership. Currently these expenses are deducted over five years.
Fringe Benefits Tax meal and entertainment concessions for Non-for-profit employees to be capped
From 1 April 2016, a single grossed-up cap of $5,000 will be introduced for salary sacrificed meal entertainment and entertainment facility leasing expenses for employees of certain non-for-profit organisations. Amounts in excess of the cap will be counted towards the standard Fringe Benefits Tax exemption caps for other benefits. All meal entertainment benefits will become reportable for the calculation of various surcharges.
Employee Share Schemes
As part of the Mid-Year Economic and Fiscal Outlook 2014-15 the Government released draft legislation to implement changes to the taxation of employee share schemes. The changes were to re-introduce the deferral of taxation on employee shares and options arrangements and the introduction of new concessions for small start-up companies. Some minor amendments to make schemes more accessible were identified during consultation. The proposed legislation including the minor amendments will take effect from 1 July 2015.
Goods and Services Tax (GST) extended to offshore supplies of services and intangibles to Australian consumers (‘Netflix tax’)
The Government intends to introduce changes so that Goods and Services Tax will apply to the purchase of digital products and services from overseas suppliers from 1 July 2017.
This will bring Australia into line with the European Union which has implemented similar changes with effect from 1 January 2015.
Combatting multinational tax avoidance
The Government has announced measures to combat tax avoidance by multinationals with global revenues of $1bn or more.
From 1 January 2016 new tax integrity measures will be introduced to counter arrangements used to avoid a taxable presence in Australia, where:
- the activities of an Australian entity are integral to the Australian customer’s decision to purchase goods or services;
- the contract is entered into with a foreign related party to the Australian entity;
- the profit from the Australian sales is booked overseas and subject to low or no global tax; and
- one of the principal purposes of the arrangement is to obtain a tax benefit.
From 1 July 2015 the maximum penalties for such companies that enter into tax avoidance and profit shifting will be doubled.
In addition, the OECD’s new transfer pricing documentation standards will be implemented from 1 July 2016.
The Government has also indicated its intention to implement the OECD initiatives in respect of hybrid mismatches and treaty abuse. These are two key aspects of the BEPS project.