Given all the recent discussion in the media abouth the Henry Review we thought it was important to share a summary of proposed changes that will impact on local businesses. Here it is;
1. Changes to Company Taxation
The company tax rate will reduce form its current level of 30% down to 28%, implemented sooner for ‘eligible small business companies’:
2. Changes to Small Business Write-Offs
From 1 July 2012, small business will be able to:
• Write off immediately assets valued at under $5,000 (currently the limit is up to $1,000)
• Write off other assets (i.e. those valued at over $5,000) in one deprecation pool at the rate of 30% (currently they may be allocated to 2 different depreciation pools). This will not apply to buildings.
3. Resource Super Profits Tax
The government’s progress on other elements of its tax reform agenda will be largely dependent on the revenue derived from the RSPT.
The RSPT will be introduced on 1st July 2012 at a rate of 40% on profits made from exploitation of non-renewable resources. It will replace the crude oil excise, and operate in parallel with State and Territory royalty regimes. Under the RSPT a refundable credit for royalties paid to State and Territory governments will be available. The refundable credit will eliminate investment distortions associated with the state royalty systems and ensure there is no ‘double taxation’ of resource profits.
The Government will consult extensively with stakeholders on the design of the RSPT.
Further information on the above changes and the Henry Tax Review can be found under the ‘Strong, Fairer, Simpler’ link contained on the Treasury website, www.treasury.gov.au or follow this link: http://www.futuretax.gov.au/pages/default.aspx
2.Superannuation cut-out extended to age 75
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