Australia

Corporate - Significant developments

Last reviewed - 20 June 2022

Temporary economic stimulus measures introduced as part of the Federal Government’s economic response to COVID-19 and still applicable include:

  • Supporting business capital investment through enhanced tax concessions, including, for business with aggregated turnover of up to 5 billion Australian dollars (AUD), the choice to claim an immediate tax deduction for the cost of an eligible depreciating asset first held and installed ready for use by 30 June 2023. See the Deductions section for more information.
  • Ongoing claims can be made for the JobMaker Hiring Credit for eligible businesses that took on additional employees aged under 35 years and between 7 October 2020 and 6 October 2021. See the Tax credits and incentives section for more information.
  • A temporary loss carryback measure for companies with an aggregated turnover of less than AUD 5 billion that have tax losses incurred in the 2019/20, 2020/21, 2021/22, and/or 2022/23 income years for offset against taxed profits from the 2018/19 or later income years. See the Deductions section for more information.

For income years commencing on or after 1 July 2021, a more targeted research and development (R&D) incentive applies. See the Tax credits and incentives section for more information.

From an industry perspective:

  • Australia’s offshore banking unit (OBU) concession is scheduled to cease to operate in the 2023/24 and later income years.
  • The Junior Minerals Exploration Incentive (JMEI), which enables eligible minerals exploration companies to generate tax credits for new shareholders based on their tax losses generated from greenfield mineral exploration expenditure, was extended until 30 June 2025. 

See the Tax credits and incentives 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 has increased to 10.5% from 1 July 2022 and will remain so until 30 June 2023. 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. 

The Australian government plans to enter into ten new and updated tax treaties by 2023. 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.

A change of federal government occurred in May 2022. The new government proposes to implement the following tax measures affecting multinationals:

  • The Organisation for Economic Co-operation and Development's (OECD’s) Two-Pillar Solution to address the tax challenges of digitalisation of the economy.
  • Replacing the thin capitalisation safe harbour method with a new test to limit debt-related deductions to 30% of profits (EBITDA).
  • Limiting the ability for multinationals to abuse Australia’s tax treaties when holding intellectual property (IP) in tax havens.
  • Greater transparency measures.

See the Group taxation section for more information.