A summary of how Budget 2015 will affect taxpayers in Australia:
Tax Hit for Working Holidaymakers
It was announced that as of the 1 July 2016, working holidaymakers will be paying higher income tax because of the loss of the tax-free threshold. Under new tax residency rules, they'll pay taxes on their income from the first dollar they earn, instead of the first $18,200 being tax-free, which is currently the case.
Working holidaymakers are generally deemed as residents for tax purposes if they're in Australia for more than 6 months, meaning they pay the lower rate of 19c on the dollar for income up to $37,000.
When the changes take effect, people in Australia deemed non-residents for tax purposes will have to pay 32.5c tax on every dollar earned up to $80,000.
This could have a huge impact on the agricultural sector, which employs many young backpackers travelling from abroad. We'll bring you more news on how backpackers will be affected as we get it.
Le remboursement moyen de superannuation est de $1908
Changes to the Zone Tax Offset (ZTO)
Fly-in fly-out (FIFO) and drive-in drive-out workers will no longer be eligible for the ZTO. The ZTO was introduced to compensate residents for the disadvantages of living in remote areas of Australia.
Excluding workers whose normal residence is not in these areas will target the ZTO at taxpayers who’ve taken up genuine residence within these zones. For example, someone who lives with their family in Perth but has a FIFO job in the Pilbara will no longer be eligible to claim the ZTO.
From 1 July 2015, The Government will increase the Department of Human Services’ powers to investigate suspected welfare fraud and non-compliance. The initiative should improve automated assessment processes at the Australian Tax Office and help avoid delays.
Diverting Profits from Australia
The Government is taking action on multinationals exploiting loopholes to avoid paying tax in Australia or elsewhere in the world. In a Diverted Profits’ Scheme, Australian customers interact almost exclusively with a local business, but when signing the contract, it’s signed with a related company in another country, escaping Australia’s tax net.
Not only does it escape Australia’s tax net, but after a series of contrived and artificial arrangements, the Australian income ends up in another related entity in a tax haven, escaping paying tax anywhere.
Profits should be taxed in the country where the economic activities deriving the profits are performed and where value is created, not in the tax haven where it’s diverted.
It’s unsustainable for local businesses to pay tax on their profits when their competitors do not.
Multinational Anti-Avoidance Law
From 1 January 2016, this law will ensure that when Australian customers deal with an Australian subsidiary or local entity integral to the customer’s decision to enter into the contract, Australian sales will be recognised as Australian income. This will ensure tax is paid on profits from economic activities undertaken in Australia.
Approximately 30 large multinational companies are suspected of diverting profits using artificial structures to avoid a taxable presence in Australia.
Where the law applies, multinationals will be subject to the Government’s new doubled penalty regime for tax avoidance and profit shifting schemes. Tax avoiders must pay the tax they owe, and face penalties of up to 100 per cent of the tax owed plus interest.
The Government will commence consultations with the community on whether further amendments are required to Australian law, consistent with the work being undertaken by the G20 and OECD.
The average tax refund Down Under is AU$2600
If you have any questions about Australian tax, get in touch with our friendly Australian tax team. Click here to get in touch.