Recently enacted Australian legislation effectively raises the tax burden for individuals with annual taxable incomes exceeding A$180,000, by imposing a temporary levy. This temporary levy is to apply from July 1, 2014 to June 30, 2017, and will also be reflected in the Fringe Benefits Tax rate.
Australia’s so-called “temporary budget repair levy” of 2 percent, raising the tax burden for certain individuals, has been enacted. On 25 June 2014, the package of 15 Temporary Budget Repair Levy bills received Royal Assent. The additional income tax rate on annual taxable income exceeding A$180,000, will apply from 1 July 2014 to 30 June 2017.
As we noted in Flash International Executive Alert 2014-057 (30 May 2014), the temporary budget repair levy will impact the rate of tax paid by individuals as well as the Fringe Benefits Tax rates over a number of years. These changes are likely to raise tax burdens for certain employees (including those on international assignment subject to Australian taxation) and their employers, and will have an impact on payroll withholdings, tax equalizations, and international assignment budgeting and cost projections.
As noted above, the temporary budget repair levy will apply from 1 July 2014 to 30 June 2017, and, therefore, is payable with respect to the 2014-15 financial year and the following two financial years.
For further information or assistance, please contact your local IES professional, or one of the following IES professionals with the KPMG International member firm in Australia:
+61 2 9335 8655
+61 3 9288 5279
+61 8 8236 3234
+ 61 8 9278 2053
The information contained in this newsletter was submitted by the KPMG International member firm in Australia.
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