The Federal Treasurer, Dr Jim Chalmers, handed down the Labor government's first Federal Budget on 22 October 2022. Here are the highlights of the tax and accounting measures announced.
- Electric vehicles under the luxury car tax threshold will be exempt from fringe benefits tax and import tariffs.
- A number of Victorian and ACT based business grants relating to the COVID-19 pandemic will be non-assessable non-exempt income for tax purposes.
- Grants will be provided to small and medium-sized businesses to fund energy efficient equipment upgrades.
- The tax treatment for off-market share buy-backs undertaken by listed public companies will be aligned with the treatment of on-market share buy-backs.
- The 2021-22 Budget measure to allow taxpayers to self-assess the effective life of intangible depreciating assets will not proceed.
- Heavy Vehicle Road User Charge rate increased from 26.4 to 27.2 cents per litre of diesel fuel, effective from 29 September 2022.
- Australia has signed a new tax treaty with Iceland.
- Additional tariffs on goods imported from Russia and Belarus have been extended by a further 12 months, to 24 October 2023.
- Ukraine goods are exempted from import duties for a period of 12 months from 4 July 2022.
- Technical amendments to the taxation of financial arrangements (TOFA) rules proposed in the 2021-22 Budget will be deferred.
- Amendments to simplify the taxation of financial arrangements (TOFA) rules proposed in the 2016-17 Budget will not proceed.
- The proposed measure from the 2018-19 Budget to impose a limit of $10,000 for cash payments will not proceed.
- Proposed changes in the 2016-17 Budget to amend the taxation of asset-backed financing arrangements will not proceed.
- The new tax and regulatory regime for limited partnership collective investment vehicles proposed in the 2016-17 Budget will not proceed.
- The Pacific Australia Labour Mobility (PALM) scheme will be expanded and enhanced.
- The amount pensioners can earn in 2022-23 will increase by $4,000 before their pension is reduced, supporting pensioners who want to work or work more hours to do so without losing their pension.
- To incentivise pensioners to downsize their homes, the assets test exemption for principal home sale proceeds will be extended and the income test changed.
- The income threshold for the Commonwealth Seniors Health Card will be increased from $61,284 to $90,000 for singles and from $98,054 to $144,000 (combined) for couples.
- The Paid Parental Leave Scheme will be amended so that either parent is able to claim the payment from 1 July 2023. The scheme will also be expanded by 2 additional weeks a year from 1 July 2024 until it reaches 26 weeks from 1 July 2026.
- The maximum Child Care Subsidy (CCS) rate and the CCS rate for all families earning less than $530,000 in household income will be increased.
- The current higher Child Care Subsidy (CCS) rates for families with multiple children aged 5 or under in child care will be maintained.
- Legislation will be introduced to clarify that digital currency (or crypto currencies) will not be treated as foreign currency for income tax purposes.
- Eligibility to make a downsizer contribution to superannuation will be expanded by reducing the minimum age from 60 to 55 years.
- The 2021-22 Budget measure that proposed relaxing residency requirements for SMSFs and small APRA-regulated funds (SAFs) from 1 July 2022, has been deferred.
- The 2018-19 Budget measure that proposed changing the annual audit requirement for certain self-managed superannuation funds (SMSFs) will not proceed.
- A requirement for retirement income product providers to report standardised metrics in product disclosure statements, originally announced in the 2018-19 Budget, will not proceed.
- Thin capitalisation rules for non-ADIs will be amended from 1 July 2023, with tests relating to ratios replaced by earnings-based tests.
- Significant global entities will be denied a tax deduction for payments to related parties in relation to intangibles held in low- or no-tax jurisdictions.
- Significant global entities and public companies will have additional reporting requirements for income years commencing from 1 July 2023.
- Proposed amendments to the debt/equity tax rules mentioned in the 2013-14 MYEFO will not proceed.
- Penalty unit increase to $275 from 1 January 2023.
- Personal Income Taxation Compliance Program extended a further 2 years to 30 June 2025.
- Shadow economy compliance program extended to 30 June 2026.
- The ATO tax avoidance taskforce will receive additional funding and is being extended to 30 June 2026.
- Financial penalties for breaches of foreign investment compliance to double from 1 January 2023.
- Access to refunds of indirect tax, including GST, fuel and alcohol taxes, under the Indirect Tax Concession Scheme has been expanded to the diplomatic and consular representations of Bhutan.
- The proposed extension of reportable transactions relating to the sharing economy deferred by 12 months to 1 July 2024.
- Funding to be given to the Tax Practitioners Board to increase compliance investigations.
- Additional funding will be provided to support the delivery of government priorities in the Treasury portfolio.
- Deductible gift recipients list to be updated.
- The 2021-22 MYEFO measure to establish a deductible gift recipient category for providers of pastoral care will not proceed.