2013/14 Key Tax Changes

• Tough year ahead for individual and business tax payers – The Government has abolished a number of tax benefit measures introduced in past few years.

• Deficit Tax/Budget Repair Levy - Temporary Budget Repair Levy of 2% applicable on taxable income in excess $180,000. This in effect increases the highest marginal tax rate from 45% to 47%. The Levy is to take effect for 3 years from 1 July 2014 until 30 June 2017.

• Bigger Medicare Levy - Increase in the basic Medicare Levy by 0.5% to 2% applies from 1 July 2014.

• Increase in 2015 FBT rate & gross-up rates – Due to the increase in Medicare Levy, a new FBT rate is 47% which is an increase of 0.5% from the FBT rate of 46.5%.

• Private health insurance rebate – In addition to income test introduced in 2012-13 tax year, 2013-14 income year there is no rebate on lifetime health cover (LHC) loading.

• Dependant tax offsets – Under changes in this year’s budget, this will be scrapped

• Mature age worker tax offset for workers over the age of 55 years at 30 June – This will be abolished from 1 July 2014

Low income super contribution for income less than $37,000 - This is axed. No longer payable.

• Removal of super guarantee upper age limit -There is no upper age limits for making super guarantee contributions. This means employers need to make super guarantee payments for eligible employees aged 70 years or over.

• Super guarantee - From 1 July 2014, the minimum super guarantee rate rises from 9.25% to 9.50%.

• First Home Saver Accounts Scheme abolished – These will be abolished from 1 July 2015.

• The new loss carry back legislation – The Government has proposed a legislation to repeal the loss carry-back rules with effect from the 2014 income year. Accordingly, companies will only be able to apply these rules for the 2013 income year.