The corporate tax rate for certain small business taxpayers (being those with aggregated turnover of less than 10 million Australian dollars [AUD]) reduced to 27.5% for the 2016/17 income year. The 27.5% rate extends from the 2017/18 income year to those small business corporate tax entities with an aggregated turnover of less than AUD 25 million; and from the 2018/19 income year to those with an aggregated turnover of less than AUD 50 million. After the end of the 2023/24 income year, the 27.5% rate for these entities will reduce progressively to 25% by the 2026/27 income year. Under currently enacted law, the corporate tax rate for all other corporate tax entities will remain at 30% (however, there is a proposal to progressively reduce the corporate tax rate for all entities, not just those noted above). See the Taxes on corporate income section.
Accelerated depreciation applies to certain depreciating assets with a cost of up to AUD 20,000 acquired and installed ready for use between 12 May 2015 and 30 June 2018 for small business entities (see the Deductions section for more information).
From 1 July 2017, the Australian goods and services tax (GST) applies to cross-border supplies of digital products and services imported by Australian consumers. From 1 July 2018, GST will be payable on certain supplies of low value goods (valued at AUD 1,000 or less) that are purchased and imported by Australian consumers.
The Australian government continues to enact a range of integrity measures that seek to address multinational tax avoidance by ‘significant global entities’ (broadly, those entities that are part of a global group with global revenue of AUD 1 billion or more), including the following new measures:
- A Diverted Profits Tax (DPT) of 40% applicable to those that engage in contrived related-party arrangements to shift their profits offshore to lower tax jurisdictions (applicable from 1 July 2017).
- Significantly increased penalties that can be applied for failing to lodge a tax return (or other tax-related document) on time (applicable to documents required to be lodged on or after 1 July 2017).
- Doubling of penalties that can be applied for making a false or misleading statement (applicable to statements made from 1 July 2017).
See Integrity measures for large multinationals in the Group taxation section for more information.
The non-final withholding tax (WHT) rate that applies to foreign residents that dispose of certain taxable Australian property increased to 12.5% from 1 July 2017. See Capital gains in the Income determination section for more information.
On 7 June 2017, Australia signed the Organisation for Economic Co-operation and Development (OECD) Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS). See the Other issues section for more information.