ey-global-tax-policy-outlook-for-2015

Australia
The following election goals were achieved:
• Repeal of the carbon tax
• Repeal of the Mining Resources Rent Tax (MRRT)
In the current tax reform environment, the following will also
be enacted:
• A personal income tax increase by a Temporary Budget
Repair levy of 2% on taxable income above A$180,000 for
three years from 1 July 2014
• Tightening of thin capitalization rules and changes to tax
exemption of foreign dividends
•
capital investment
• A drive to reduce red tape, which includes regulation repeal
days scheduled in parliament
•
revenue roles of state and federal governments, with an
upcoming Federation Review as well as a potential structural
tax reform to take to the 2016 election. The review of tax
reform directions is delayed, with a white paper to be issued by
the end of 2015.
2.2 Fiscal consolidation vs. stimulus
• Headline CIT rate
•
28.5%, effective from 1 July 2015. A new 1.5% Paid Parental
Leave Scheme levy is also proposed on companies with
taxable incomes in excess of $A5 million (levied on the
excess income amount), effective from 1 July 2015 but has
much opposition.
• Interest deductibility
•
the former government’s plans to deny the streamlined tax
deductions for businesses to fund capital injected into foreign
subsidiaries (by repealing section 25-90 of the Income
Tax Assessment Act 1997) and is instead proposing to
“introduce a targeted anti-avoidance provision after detailed
consultation with stakeholders” to “address certain conduit
arrangements.”
• Hybrid mismatches
• The tax exemption of foreign non-portfolio dividends has
changed to allow an exemption only for “foreign equity
distributions” (dividends and returns on non-share equity
• The Board of Taxation is undertaking a post-implementation
review of the debt equity test, including possible tax
arbitrage opportunities. The report is to be provided to the
Assistant Treasurer in March 2015, which could give rise to
new tax policies.
• Treatment of losses
• Capital gains tax
•
•
• Controlled foreign companies
The outlook for global tax policy in 2015 |
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