2022-2023 Budget Tax Measures
Didn’t watch the budget last night, or too time poor to read the budget papers in detail? What follows is a selection of the key tax measures that are aimed to assist businesses in South Australia:
Temporary reduction in fuel excise
The rate of excise and excise-equivalent customs duty currently applying to petrol and diesel is 44.2 cents per litre. This measure will halve the rate on petrol and diesel to 22.1 cents per litre from 30 March 2022, with the price faced by consumers expected to be reduced by a larger magnitude given GST will be levied on the lower excise rate. This measure will remain in place until 28 September 2022.
COVID-19 business grants non-assessable non-exempt income
The South Australia COVID-19 Tourism and Hospitality Support Grant and the South Australia COVID-19 Business Hardship Grant made non-assessable non-exempt (NANE) for income tax purposes until 30 June 2022
Tax deductibility of COVID-19 test expenses
The costs of taking a COVID-19 test to attend a place of work are tax deductible for individuals from 1 July 2021. Fringe benefits tax (FBT) will not be incurred by businesses where COVID-19 tests are provided to employees for this purpose.
Digitalising trust income reporting and processing
The Government will digitalise trust and beneficiary income reporting and processing, by allowing all trust tax return filers the option to lodge income tax returns electronically, increasing pre-filling and automating ATO assurance processes. The measure will commence from 1 July 2024, subject to advice from software providers about their capacity to deliver.
Employee Share Schemes – expanding access
Where employers make larger offers in connection with employee share schemes in unlisted companies, participants can invest up to:
- $30,000 per participant per year, accruable for unexercised options for up to 5 years, plus 70 per cent of dividends and cash bonuses; or
- any amount, if it would allow them to immediately take advantage of a planned sale or listing of the company to sell their purchased interests at a profit.
Patent Box – expanding the patent box tax concession
Concessional tax treatment to be provided to for corporate taxpayers who commercialise:
- eligible patents linked to agricultural and veterinary (agvet) chemical products listed on the Australian Pesticides and Veterinary Medicines Authority (APVMA), PubCRIS (Public Chemicals Registration Information System) register, or eligible Plant Breeder’s Rights (PBRs); and
- their patented technologies which have the potential to lower emissions.
Eligible corporate income will be subject to an effective income tax rate of 17 per cent for PBRs and patents granted or issued after 29 March 2022 and for income years starting on or after 1 July 2023. Eligible income will be taxed at the concessional tax rate to the extent that the research and development of the innovation took place in Australia.
Modernisation of pay as you go (PAYG) instalment systems
The Government will enable companies to choose to have their pay as you go (PAYG) instalments calculated based on current financial performance, extracted from business accounting software, with some tax adjustments. This will support business cash flow by ensuring instalments reflect current performance.
Small Business measures:
Small businesses (with aggregated annual turnover of less than $50 million) will be able to deduct an additional 20 per cent of expenditure incurred:
- external training and up-skilling courses provided to their employees. The boost will apply to eligible expenditure incurred from 7:30pm (AEDT) on 29 March 2022 (Budget night) until 30 June 2024. The external training courses will need to be provided to employees in Australia or online, and delivered by entities registered in Australia; and
- on business expenses and depreciating assets that support their digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud-based services. An annual cap will apply in each qualifying income year so that expenditure up to $100,000 will be eligible for the boost.
Varying the GDP uplift factor for tax instalments
The GDP uplift factor for pay as you go (PAYG) and GST instalments will be set at 2 per cent for the 2022-23 income year. This uplift factor is lower than the 10 per cent that would have applied under the statutory formula. The lower uplift rate will provide cash flow support to small businesses, including sole traders, and other individuals with investment income. Around 2.3 million taxpayers are expected to benefit from this measure.
Tax Integrity – ATO Tax Avoidance Taskforce on multinationals, large corporates and high wealth individuals
The Government will provide $325.0 million in 2023-24 and $327.6 million in 2024-25 to the ATO to extend the operation of the Tax Avoidance Taskforce by 2 years to 30 June 2025.
The Taskforce was established in 2016 to undertake compliance activities targeting multinationals, large public and private groups, trusts and high wealth individuals. It also scrutinises specialist tax advisors and intermediaries that promote tax avoidance schemes and strategies.