Checklist of tax changes taking effect in 2018/19

This checklist sets out significant changes that are scheduled to operate from the 2018/19 income year (with cross-references to the commentary in the Guide where they are discussed). Note that, in some cases, implementation of these changes may be dependent on the future passage of the necessary legislation.

INDIVIDUALS

• The individual income tax rate thresholds will be progressively increased under a seven-year Personal Income Tax Plan beginning from 2018/19 ¶2-120
• A low and middle income tax offset is available for the 2018/19, 2019/20, 2020/21 and 2021/22 income years ¶15-300
• Individuals with superannuation account balances of $500,000 or less can make “catch-up” superannuation contributions using their unused concessional contributions caps (for up to five years) from 1 July 2018 ¶13-775
• Individuals may withdraw voluntary contributions made under the First Home Super Saver Scheme (up to certain limits) together with associated earnings for the purposes of purchasing their first home from 1 July 2018 ¶13-790
• Individuals aged 65 years or older can make downsizer contributions of up to $300,000 into their superannuation using the proceeds from the sale of their main residence where sale contracts are exchanged on or after 1 July 2018 (and superannuation providers can accept such contributions) ¶13-795, ¶13-825
• Whistleblowers who disclose information to the ATO on tax avoidance behaviour will be provided with protection from 1 July 2018 ¶1-220, ¶41-300
• The car expenses cents per kilometre rate is increased from 66 cents to 68 cents for 2018/19 ¶16-370
• A new Child Care Subsidy is available from 2 July 2018 to support families where both parents work ¶2-133
• The maximum voluntary excess levels for hospital cover products providing individuals an exemption from the Medicare levy surcharge will increase from 2018/19 ¶2-335
• For purposes of claiming expenditure towards the film producer offset, an Australian residency requirement applies to individuals that perform services outside Australia for films that require a foreign location to be used for principal photography from 1 July 2018 ¶20-340

COMPANIES AND SMALL BUSINESS

• The lower corporate tax rate of 5% applies for qualifying companies that have an aggregated turnover of less than $50m for 2018/19 and have no more than 80% of their assessable income consisting of “base rate entity passive income” ¶3-055
• The definition of a “significant global entity” (SGE) will be expanded, commencing on or after 1 July 2018 ¶30-200, ¶41-500
• The immediate write off for assets costing less than $20,000 by small business entities has been extended to 30 June 2019 ¶7-250
• With effect from 8 May 2018, an additional basic condition will apply in relation to the CGT small business concessions where the CGT event involves a partnership interest to prevent the concessions from being available for Everett assignments ¶7-120,

¶7-126

OTHER INCOME TAX CHANGES

• Tax-exempt entities becoming taxable after 8 May 2018 will not be entitled to tax deductions in relation to repayment of the principal of a concessional loan ¶10-630
• A new regime for limited partnership collective investment vehicles is proposed to operate from 1 July 2018 ¶5-030, ¶6-410
• Venture capital tax concessions are available for investments in financial technology businesses (“fintech”) made on or after 1 July 2018 ¶10-845
• Legislation has been introduced to reform the R&D tax incentive for income years starting on or after 1 July 2018 ¶20-160,

¶41-500

• Legislation has been introduced that will amend the calculation of balancing adjustment amounts for R&D assets from 1 July 2018 ¶17-420, ¶41-500
• Amendments to the thin capitalisation rules requiring compliance with accounting standards for valuation of assets, liabilities (including debt capital) and equity capital are proposed to apply from 30 pm (AEST), on 8 May 2018 ¶22-700, ¶41-500
• Amendments to the thin capitalisation rules to prevent double gearing structures are proposed for income years starting on or after 1 July 2018 ¶22-700, ¶41-550
• From 1 July 2018, key barriers to the use of asset-backed financing arrangements will be removed ¶23-200
• From 19 August 2018, primary producers can claim an immediate deduction for capital expenditure on fodder storage assets

¶18-085

SUPERANNUATION FUNDS

• From 1 July 2018, non-arm’s length expenditure is proposed to be taken into account when determining whether the non-arm’s length income taxation rules apply to a transaction ¶13-170
• A fund member’s share of the outstanding balance of a limited recourse borrowing arrangement that commenced on or after 1 July 2018 is proposed to be included in their total superannuation balance in certain circumstances ¶14-050
• The release authority regime governing the release of superannuation money following the issue of an excess concessional or non-concessional contributions determination, or an FHSS determination, or an assessment of Division 293 tax will come into effect from 1 July 2018 ¶13-755

SUPERANNUATION GUARANTEE

• The Superannuation Guarantee (Administration) Regulations 2018 have been made to replace the Superannuation Guarantee (Administration) Regulations 1993 which sunset on 1 October 2018 ¶39-000
• Proposed amendments will give employees under workplace determinations or enterprise agreements made on or after 1 July 2018 the right to choose their superannuation fund under the choice rules, and provide that amounts sacrificed under an employee salary sacrifice arrangement cannot reduce an employer’s mandated SG contributions ¶39-240, ¶39-260, ¶41-200
• A one-off 12-month amnesty period is proposed from 24 May 2018 to 23 May 2019 to encourage employers to self-correct historical SG non-compliance, and allow employees receiving superannuation contributions from multiple employers to apply to the Commissioner to opt out of the regime in respect of an employer ¶39-030, ¶39-500, ¶41-450

GOODS AND SERVICES TAX

• Purchasers of newly constructed residential premises or new subdivisions are required to remit GST directly to the ATO from 1 July 2018 ¶34-230
• Offshore supplies of low value goods to a consumer will be treated as being connected with Australia, and therefore may be subject to GST from 1 July 2018 ¶34-100, ¶34-105, ¶34-250
• The luxury car tax on cars re-imported into Australia, following a refurbishment overseas, will be removed from 1 January 2019

¶34-220, ¶41-500

OTHER CHANGES

• Rules on director penalties and security deposits for tax-related liabilities will be strengthened ¶25-420, ¶25-560, ¶41-400
• The Single Touch Payroll reporting framework starts on 1 July 2018 for substantial employers ¶26-630
• New offences have been introduced to deter the production, use and distribution of electronic sales suppression tools from 4 October 2018 ¶29-310, ¶29-700, ¶30-005
• From 1 July 2018, the taxable payments reporting system will be extended to contractors in the courier and cleaning industries

¶33-200

• Australia has signed and ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). The measures in the MLI will enter into force for Australia on 1 January 2019 ¶22-165
• From 1 July 2018, purchasers of certain new residential real property must withhold an amount equivalent to the GST from the contract price ¶26-330
• The ATO will apply penalty relief to inadvertent errors in tax returns and activity statements made by eligible taxpayers that are due to failing to take reasonable care or taking a position on income tax that is not reasonably arguable from 1 July 2018 ¶29-140
• New fuel tax credit rates are applicable from 1 August 2018 ¶40-210, ¶40-300

If you want to know how these changes will affect your tax return for FY 19 then you can connect with your accountants for discussion regarding this and how much impact of these changes reflect in your ITR