Australian Federal Budget 2016-17

The Commonwealth Government has introduced a pre-election budget which in its own words is “not just any other budget” and has a focus on jobs, investment and growth. 

As part of the Government’s Ten Year Enterprise Tax Plan, the 2016-17 Federal Budget seeks to make a significant number of changes to Australia’s current tax landscape. The key changes relate to introduction of new tax concessions for businesses, extensive integrity measures primarily focussed on multinational corporations and changes to existing superannuation concessions. 

The Government has also introduced as a new Collective Investment Regime which is likely to redefine the way collective investments are made in Australia. The tax changes, together with infrastructure spending, are aimed at generating economic stimulus. Notwithstanding the measures, deficits will remain (albeit become smaller) over the next few years.

For a confidential discussion about how these measures may impact your business, please contact us.


For an in-depth analysis, please click on an area below:


Budget.gov.au | #Budget2016

Among the more significant reforms outlined in the Budget, the Government will:

introduce new Multinational Tax Avoidance Measures. These measures include the introduction of a Diverted Profits Tax, a new Tax Avoidance Task Force within the Australian Taxation Office, stronger protections for whistle-blowers, higher penalties for avoidance and further consideration of anti-hybrid rules;

work to strengthen Australia’s existing transfer pricing laws with effect from 1 July 2016. The changes will seek to incorporate recent changes to the OECD’s guidelines;

introduce a new tax and regulatory framework for two new types of collective investment vehicles. A corporate vehicle will be introduced for income years starting on or after 1 July 2017. This will be followed by a limited partnership vehicle for income years starting on or after 1 July 2018. These changes form part of the Government’s implementation of the Asia Region Funds Passport;

progressively reduce the corporate tax rate over the next decade. From 1 July 2016, the company tax rate will be reduced to 27.5% for companies with turnover of less than $10 million. A phased in reduction for larger business will also apply with a long term aspirational rate of 25% in the 2026-27 year;

reform the taxation of financial arrangements rules to reduce scope, decrease compliance costs and increase certainty. The new simplified rules are expected to apply to income years on or after 1 January 2018;

significantly amend Australia’s superannuation regime, including restricting superannuation tax concessions for high income earners and better targeting superannuation concessions more generally;

increase the unincorporated small business discount to 8% and increase the threshold to $5 million;

extend the immediate small business write-off allowance for assets valued at $20,000 or less;

extend the infrastructure spend to $50 billion to stimulate economic growth. This includes $2.9 billion for significant new investments in essential infrastructure across Australia; and

raise the personal tax threshold to $87,000 (from $80,000) and remove the 2% temporary deficit levy.

Download our analysis as a PDF

Our full Australian Federal Budget analysis is also available in a PDF format.

Contact us

Here at King & Wood Mallesons, we bridge the gap between tax and legal advice.

Our full service legal capability means we can streamline and project manage the advisory process as well as safeguard your interests should a dispute arise. We make sense of complex tax systems, enabling you to do business more easily, manage your commercial risk and save money – wherever you are in the world. For assistance with how the Australian Federal Budget affects your business, please contact one of our Australian partners below:

Justin Cherrington
Justin Cherrington
Head of Tax, Australia
Email
Richard Snowden
Richard Snowden
Corporate Tax & Funds
Email
Michael Clough
Michael Clough
Corporate Tax & Tax Disputes
Email
Andrew Clements
Andrew Clements
Funds
Email
Scott Heezen
Scott Heezen
Banking & Infrastructure
Email

Nathan Hodge
Nathan Hodge
Superannuation & Pensions
Email
Darren McClafferty
Darren McClafferty
Corporate Tax & Disputes
Email
Katrina Parkyn
Katrina Parkyn
Resources & Indirect Tax
Email
Michael Perez
Michael Perez
Resources, Tax Disputes & Indirect Tax
Email
Tim Sherman
Tim Sherman
M&A & Private Equity
Email

Ruth Stringer
Ruth Stringer
Superannuation & Pensions
Email
Jerome Tse
Jerome Tse
Tax Disputes & Transfer Pricing
Email
David Wood
David Wood
Banking & Financial Services
Email
   


Meet more of the team

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