Jenny Wong discusses tax legislation currently before Parliament.
As Prime Minister Scott Morrison and Treasurer Josh Frydenberg get their feet under their respective desks, it’s timely to reflect on what tax legislation we saw passed in the last sittings of parliament, and what is still outstanding. Parliament resumes on September 10.
As we know the Federal Government’s plans for company tax rate cuts, Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017, did not pass the Senate last week. This legislation would have reduced the company tax rate down to 25 percent to all corporate tax entities.
Related legislation, Treasury Laws Amendment (Enterprise Tax Plan Base Rate Entities) Bill 2018, did pass however, and now awaits Royal Assent. The Bill disqualifies companies from the lower tax rate if more than 80 percent of their income is passive. The Australian Taxation Office (ATO) has also released a draft ruling LCR 2018/D7 that provides advice on this Bill including what amounts are base rate entity passive income.
Also to pass were the anti-hybrid measures, Treasury Laws Amendment (Tax Integrity and Other Measures No. 2) Bill 2018, which prevents entities that are liable to income tax in Australia from being able to avoid income taxation, or obtain a double non-taxation benefit. The measures apply from 1 January 2019.
The Treasury Laws Amendment (OECD Multilateral Instrument) Bill 2018 passed the Senate too which amends the International Tax Agreements Act 1953 to give legislative effect to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting.
Tax legislation still to be finalised in parliament includes:
Public Reporting of Corporate Entity Tax: Taxation Administration Amendment (Corporate Tax Entity Information) Bill 2017 is a private members bill introduced into the Senate by Senator Katy Gallagher in August last year that proposes to amend the Taxation Administration Act 1953 to lower the threshold for the public reporting of corporate entity tax information by the Australian Taxation Office (ATO) for private corporate entities to $100 million from $200 million. However, the Greens proposed to reduce the threshold to $50 million and this has passed the Senate and the Bill moved to the House for debate.