A corporate tax rate of 27.5% applies to certain small business corporate tax entities with an aggregated turnover of less than 50 million Australian dollars (AUD) for the 2018/19 and 2019/20 income years, provided that the company does not derive substantial passive income. The 27.5% rate for these entities will reduce to 26% for the 2020/21 income year and then to 25% from the 2021/22 income year. The corporate tax rate for all other corporate tax entities remains at 30%. See the Taxes on corporate income section.
Reforms have been made to the Petroleum Resource Rent Tax (PRRT) regime with effect from 1 July 2019, where onshore oil and gas projects are removed from the PRRT regime. See the Other taxes section for more information.
A Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP-11) between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam entered into force for Australia on 30 December 2018. See the Other taxes section for more information.
Accelerated depreciation applies to certain depreciating assets with a cost of up to AUD 25,000 (previously AUD 20,000) acquired and installed ready for use from 29 January 2019 for small business taxpayers with a turnover of up to AUD 10 million. This was extended from 7.30pm (AEDT) 2 April 2019, so as to apply to certain depreciating assets with a cost of up to AUD 30,000 and applicable to business with a turnover of up to AUD 50 million. See the Deductions section for more information.
Access to company losses is now subject to a similar business test, which supplements the existing same business test loss integrity rules, for losses incurred in income years from 1 July 2015. See the Deductions section for more information.
The Australian government has implemented the Organisation for Economic Co-operation and Development (OECD) hybrid mismatch rules, which will generally apply to income years commencing on or after 1 January 2019. See the Group taxation section for more information.
Australia and Israel signed a new tax treaty on 28 March 2019, which, following its entry into force, will represent the first tax treaty between the two countries. See the Withholding taxes section for more information.
Reforms have been made affecting certain foreign investors. These reforms, which broadly apply from 1 July 2019, subject to transitional relief, relate to limiting access to tax concessions for those foreign investors involved in stapled structure arrangements by increasing the managed investment trust (MIT) withholding rate on fund payments that are attributable to non-concessional MIT income to 30%, limiting the withholding tax (WHT) exemption for superannuation funds for foreign residents, and limiting access to tax concessions for certain sovereign entities. See the Withholding taxes section for more information.
The OECD Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS) has legal effect in relation to certain tax treaties in Australia from as early as 1 January 2019. See the Other issues section for more information.
New laws applicable from 1 July 2019 codify and limit the scope of the sovereign immunity tax exemption. See the Other issues section for more information.