Question:
Australia’s brand new carbon tax
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
To the congratulations of other countries, Prime Minister Julia Gillard has succeeded in getting the carbon tax legislation through Parliament. She has furthermore announced that the Liberal/National Party Coalition will be unable to repeal the legislation if elected.
We are unsure as to how a minority Government, showing disastrous poll figures, can be so bold as to pass legislation demonstratively against the will of the people in such a way as to bind future democratically elected Governments.
Currently, negotiations are proceeding internationally about the future form of emissions reducing protocols. Poor countries want a second-generation Kyoto Protocol because it obliges rich countries to cut emissions but they have no obligations. Rich countries want non-binding agreements.
There will be an international conference in Durban in December to try to achieve a Post-Kyoto agreement before the current one expires. Success is unlikely.
Australia has adopted a $23 per tonne carbon tax, whilst Europe’s carbon price has been on a downward trend and currently sits at $10. The voluntary Chicago carbon exchange price fell to virtually nothing prior to its closure last year.
Is Australia being crazy brave? In business one thinks very hard and carefully before committing substantial resources to a project that is being deserted by others.
However, whatever its merits, it is now here and businesses must plan accordingly. LOVETTS have sponsored a Webinar to discuss this issue and its effect on business. We will publish extracts from the Webinar in December taxInsight.
