Australia

The following new tax incentives can apply to eligible businesses:

• A Digital Games Tax Offset, a refundable income tax offset, which can apply to qualifying expenditure incurred on or after 1 July 2022 by companies that develop digital games in Australia. See the Tax credits and incentives section for more information.
• Small and medium businesses (i.e. those with aggregated annual turnover of less than 50 million Australian dollars [USD]) have access to temporary tax boosts in the form of an additional 20% deduction for eligible expenditure incurred from 7:30 pm (AEDT) on 29 March 2022 for the purposes of digital operations or digitising operations and also for external training of employees. See the Deductions section for more information.

Employer-provided zero or low emissions vehicles with a value at first retail sale below the luxury car tax threshold for fuel-efficient vehicles are not subject to fringe benefits tax where provided from 1 July 2022. Furthermore, from 1 July 2022, there is no customs duty on electric vehicles, plug-in hybrid vehicles, and hydrogen fuel-cell vehicles with a customs value less than the fuel-efficient luxury car tax threshold. See the Other taxes section for more information.

Under the superannuation guarantee (SG) scheme, which requires employers to contribute a certain percentage of an employee's earnings base, subject to limited exceptions, to a registered superannuation fund or retirement savings account on behalf of the employee, the required SG percentage increased to 11% from 1 July 2023 and will remain so until 30 June 2024, at which time it will increase to 11.5%. See the Other taxes section for more information.

The state of Victoria has a windfall gains tax that applies to the increase in the value of land in Victoria that results from a rezoning that takes effect on or after 1 July 2023. See the Other taxes section for more information. 

Australia has a new free trade agreement with the United Kingdom (UK) that entered into force on 31 May 2023. See the Other taxes section for more information. 

The Australian government plans to enter into many new and updated tax treaties in 2023, with a new treaty with Portugal signed on 30 November 2023. The treaty with Iceland has entered into force to apply from as early as 1 January 2024. See the Withholding taxes section for more information.

A new tax and regulatory framework to support a corporate collective investment vehicle (CCIV) now applies with effect from 1 July 2022. In broad terms, a CCIV is a type of company that is limited by shares and used for funds management and is taxed on a flow-through basis.

Effective for income years commencing on or after 1 July 2023, the thin capitalisation safe harbour method applicable to non-financial entities is replaced with a new test to limit debt-related deductions to 30% of tax-determined profits (EBITDA), the worldwide gearing test is replaced with a new earnings-based group-ratio rule, and the use of the arm’s-length debt test will be restricted to external (third party) debt. Furthermore, with effect for income years commencing on or after 1 July 2024, new debt deduction creation rules can apply to deny deductions for costs of related party debt used to fund the acquisition of certain capital gains tax (CGT) assets from an associate or to fund certain payments and distributions to associates. See the Group taxation section for more information.

The following tax measures affecting multinationals are soon to be implemented:

• Australia will be implementing the Global Anti-Base Erosion (GloBE) Rules, a key component of the Organisation for Economic Co-operation and Development's (OECD’s) Two-Pillar Solution to address the tax challenges of digitalisation of the economy with an effective date for some measures as early as income years commencing on or after 1 January 2024, in addition to a 15% domestic minimum tax applying to income years starting on or after 1 January 2024. See the Taxes on corporate income section for more information.
• Deductions for payments made from 1 July 2023 by a significant global entity to related parties that relate to intangibles held in a low or no-tax jurisdiction are denied. See the Group taxation section for more information. 
• Greater tax transparency measures. See the Other issues section for more information.