In this Sky Update, we bring you all the latest tax news along with some other items that may pique your interest.
Tax cut to be closed off for passive investment companies
The Government has released a Bill to deny access to the lower corporate tax rate of 27.5% (down from 30%) for companies with predominantly passive income. Under the changes, companies will qualify for the lower tax rate only if:
- their passive income is less than 80% of their assessable income for the year;
- they “carry on a business” in that year; and
- they come below the aggregated turnover threshold for the year ($25 million for 2017–2018).
Export Market Development Grant (EMDG) deadline looms
With the 30 November deadline looming, Austrade has reminded businesses seeking to claim the EMDG for 2016-2017 to get their applications in.
If you run a SME Australian business, you may be eligible for grants representing up to 50% of your eligible export promotion expenses. The scheme is open to exporters of products and services along with inbound tourism operators and organizers of conferences and events in Australia.
Legislation for First Home Super Saver scheme and downsizer super contributions
A Bill has been introduced into Parliament to establish the First Home Super Saver (FHSS) scheme and allow people aged 65 or over to make “downsizer contributions” to their super.
The FHSS scheme will allow people to make voluntary contributions into super, take advantage of the associated tax concessions, and later withdraw the contributions and associated earnings to buy their first home.
The downsizer contribution changes will allow older Australians who sell their main residence from 1 July 2018 to make non-deductible contributions of up to $300,000 to their superannuation from the sale proceeds.
The Bill has been passed by the House of Representatives and is currently before the Senate.
Gaming Machine Entitlements update
Further information regarding the new 2022 Gaming Entitlements has been released. Venues will be required to pay a deposit for the new entitlements in two equal installments in February 2018 and February 2019. The deposit payable will be 5% for Clubs and 10% for Hotels.
The balance will then be due for payment in August 2022. Deferred payment arrangements will be available for Clubs (7 years) and Hotels (5 years) from August 2022.
The new entitlements will be a significant investment for Clubs and Hotels. Operators should not delay in undertaking analysis and considering funding options.
New financial and superannuation complaints authority
A Bill has been introduced to establish a new external dispute resolution framework and an enhanced internal dispute resolution framework for the Australian financial system.
Consumers will have easy access to a single external dispute resolution scheme, the Australian Financial Complaints Authority (AFCA).
Certain firms that provide financial and credit services will need to be members of AFCA, including:
- Australian financial services licensees;
- Unlicensed product issuers;
- Unlicensed secondary sellers;
- Australian credit licensees and credit representatives;
- Regulated superannuation funds (other than SMSFs);
- Approved deposit funds;
- Retirement savings account providers;
- Annuity providers; and
- Life policy funds and insurers.
The Bill had been referred to the Senate Economics Legislation Committee which has issued a report on the Bill on 17 October.
We will keep you informed as the Bill progresses through Parliament.
Don’t miss the 2017 personal Income Tax Return due date
If you prepare your own personal income tax return, you need to ensure that it is lodged by 31 October or face late lodgement penalties.
If you get a Registered Tax Agent (Eg Sky Accountants) to lodge your income tax return, you will have access to an extended due date beyond 31 October. In most cases this due date will be 15 May 2018.
If you have not previously self-prepared and want access to the extended due date, you need to contact a Registered Tax Agent and get onto their lodgement list by 31 October.
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