2017/18 Key Tax Changes

o Small business $20,000 tax break is extended and will be continued in the 2018/19 financial year – Annual turnover of less than $10 million, you can claim individual expenses of up to $20,000 worth of depreciating assets in each single instant write-off each financial year.

o Cease Temporary Budget Repairs Levy for 2017-18 assessments onwards – As part of the 2014-15 Federal budget the government introduced a temporary budget repair levy. Individual taxpayers with a taxable income of more than $180K per year were subjected to 2% of each dollar over $180K. The levy will cease to apply from 1 July 2017.

o Low and Middle Income Tax Offset – The Low and Middle Income Tax offset of up to $530 is to apply from 1 July 2018 until 30 June 2022 and is in addition to the Low Income Tax Offset. The offset will be applied on an annual basis as part of the annual income tax assessment. The offset will apply as follows:

Up to $37K $200 offset

$37K to $48K $200 plus 3 cents for each dollar over $37K

$48K to $90K $530 offset

$90K to $125,333 $530 less 1.5 cents for each dollar over $90K

o Disallow the deduction of travel expenses for residential rental property – From 1 July 2017, travel expenses relating to inspecting, maintaining, or collecting rent for a residential rental property cannot be claimed as deductions by investors. The travel expenditure is also not recognised in the cost base of the property for CGT purposes.

o GST on low value imported physical goods from 1 July 2018 – The Government has passed legislation to reduce the current tax-free threshold on online sales of imported physical goods from $1,000 to zero.

o Tax Offset for Spouse Contributions – From 1 July 2017, the 18% tax offset of up to $540 will be available for any individual, whether married or defacto, contributing to the super account of a spouse whose income is up to $37,000. This is an increase from the previous income threshold of $10,800. As is currently the case, the offset is gradually reduced for income above this level and completely phases out at an income above $40,000.

o Tax Deductions for Personal Superannuation Contributions – Before 1 July 2017, an income tax deduction for personal super contributions was only available to people who earned less than 10% of their income from salary or wages. From 1 July 2017, the 10% rule is removed allowing most Australians under 75 to claim an income tax deduction for any personal super contributions made into an eligible super fund. These amounts will count towards the individual’s concessional contributions cap and be subject to 15% contributions tax.

o Enterprise Tax Plan – Reducing the Company Tax Rate 2018 – On 1 September 2016, the government introduced Treasury Laws Amendment Bill 2016 that proposed to reduce the corporate tax rate for corporate entities that are carrying on a business and have an aggregated turnover of less than $25M for the 2017-18 income year and less than $50M for the 2018-19 income year. This Bill received Royal Assent on 17 May 2017. On 18 October 2017, the government introduced the Treasury Laws Amendment Bill 2017. If passed, only corporate entities who meet the aggregated turnover threshold will be eligible for the lower corporate tax rate of 25%. The date of effect will be from the 2017-18 income year.

o New HELP repayment rates and thresholds – From 1 July 2018, a new lower income repayment threshold of $42,000 will be ushered in with a repayment rate of 1%. Higher threshold bands will increase to a top 10% repayment rate on income over $119,882.