TAXATION – GOVERNMENT POLICY – AUSTRALIA

Company tax drop will pay off, says McKibbin

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Original article by Ben Potter
The Australian Financial Review – Page: 7 : 13-May-16

Prominent economist Warwick McKibbin has urged the Coalition to proceed with its proposed reduction in the company tax rate despite its high cost. The policy is estimated to cost $A48 billion over 10 years but McKibbin says it will add $A160 billion to GDP in the long-term. He disagrees with the assessment of the policy’s future benefits by Victoria University’s Janine Dixon, who calculated that a company tax cut would increase GDP while reducing gross national product by between $A800 and $A2,000 per capita.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN LABOR PARTY, VICTORIA UNIVERSITY. CENTRE OF POLICY STUDIES

Business lashes PM on super, tax

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Original article by Patrick Durkin, Phillip Coorey
The Australian Financial Review – Page: 1 & 5 : 11-May-16

Asciano chairman Malcolm Broomhead has questioned whether the Australian Government will act on its May 2016 Budget commitment to progressively reduce the company tax rate to 25 per cent. He says the Government has already broken its promise to make no changes to the superannuation regime, and criticised the retrospective nature of the super tax reforms. Treasurer Scott Morrison and Foreign Minister Julie Bishop have emphasised that the tax changes will only apply to future rather than past super earnings.

CORPORATES
ASCIANO LIMITED – ASX AIO, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF FOREIGN AFFAIRS AND TRADE, AUSTRALIAN LABOR PARTY, NATIONAL PARTY OF AUSTRALIA, WHITEHAVEN COAL LIMITED – ASX WHC, BHP BILLITON LIMITED – ASX BHP, HOST-PLUS, INSTITUTE OF PUBLIC AFFAIRS LIMITED, LIBERAL PARTY OF AUSTRALIA

Tax crackdown will be far reaching

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Original article by Joanna Mather
The Australian Financial Review – Page: 17 : 5-May-16

The Corporate Tax Association’s Michelle de Niese says the diverted profits tax outlined in the Australian Government’s May 2016 Budget may prove to be broader in scope than a similar tax in the UK. Companies found to have engaged in profit-shifting will face a tax rate of 40 per cent on such profits, compared with the corporate tax rate of 30 per cent. Mark Konza of the Australian Taxation Office adds that the new tax may affect more taxpayers than the multinational anti-avoidance law, which was introduced in 2015.

CORPORATES
CORPORATE TAX ASSOCIATION, AUSTRALIAN TAXATION OFFICE, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY, RSM PTY LTD, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, NETFLIX INCORPORATED

Morrison carves up super to fund business tax cuts

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Original article by Phillip Coorey
The Australian Financial Review – Page: B1-B2 : 4-May-16

The Australian Government forecasts that the Budget deficit will rise from $A37.4bn to $A39.9bn in 2015-16, while it expects the nation’s net debt to peak at 25.8 per cent of GDP in 2017-18. The May 2016 Budget outlines plans to progressively reduce the tax rate for all businesses to 25 per cent by 2026-27. Businesses whose turnover does not exceed $A10m will benefit from 1 July, when their tax rate will be reduced to 27.5 per cent. The Budget also includes changes to the tax regime for superannuation contributions and an increase in the $A80,001 income tax threshold to $A87,001.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, RESERVE BANK OF AUSTRALIA

Average Joes saved from bracket creep

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Original article by Fleur Anderson
The Australian Financial Review – Page: B5 : 4-May-16

The 37 per cent personal income tax rate threshold will be raised from $A80,000 to $A87,000. The new measure, announced by the Federal Government in the May 2016 Budget, will take effect on 1 July. Treasurer Scott Morrison said that 500,000 taxpayers will benefit from the "bracket-creep" tax cut.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY

Tax cut to 27.5pc for SMEs while big end of town waits

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Original article by Sid Maher
The Australian – Page: 1 & 4 : 3-May-16

The Australian Government’s May 2016 Budget will include a one per cent reduction in the small and medium enterprise tax rate, to 27.5 per cent. The lower tax rate is expected to apply to companies with turnover of up to $A5m, compared with a threshold of $A2m at present. Unincorporated businesses and sole traders are also expected to receive tax relief in the Budget. However, the tax rate for large companies will remain at 30 per cent, although the Government plans to progressively reduce it to 25 per cent.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY

Company tax cuts: in the future

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Original article by Phillip Coorey, Patrick Durkin, Jamie Freed
The Australian Financial Review – Page: 1 & 4 : 2-May-16

The Australian Government’s May 2016 Budget is expected to provide tax relief for small and medium enterprises. However, the Government is likely to opt to phase in a reduction in the corporate tax rate over a period of time. The Business Council of Australia continues to push for the tax rate for all businesses to be initially reduced to 28.5 per cent, and eventually to just 25 per cent. Meanwhile, some business leaders argue that a priority for the Budget should be ensuring that government spending is sustainable.

CORPORATES
BUSINESS COUNCIL OF AUSTRALIA, WESFARMERS LIMITED – ASX WES, QANTAS AIRWAYS LIMITED – ASX QAN, FORTESCUE METALS GROUP LIMITED – ASX FMG, SEEK LIMITED – ASX SEK, AUSTRALIA POST, AUSTRALIA. DEPT OF THE TREASURY, KPMG AUSTRALIA PTY LTD, NESTLE AUSTRALIA LIMITED, AUSTRALIAN INSTITUTE OF COMPANY DIRECTORS, AUSTRALIAN LABOR PARTY, SQUARE PEG CAPITAL PTY LTD

Super curbs to top up women

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 2-May-16

The Australian Government’s May 2016 Budget will include a scheme that is similar to the Low Income Superannuation Contribution, which provides people on low incomes with a government co-contribution. Treasurer Scott Morrison says the "top-up" scheme will be funded via a reduction in superannuation tax concessions. The Budget will also include an increase in the $A80,001 income tax threshold in order to combat so-called bracket creep.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF FINANCE

Double tax cut for best paid

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 26-Apr-16

People with annual income of more than $A180,000 will benefit from abolition of the temporary deficit levy and an increase in the $A80,001 income tax threshold in the Australian Government’s May 2016 Budget. The levy was introduced in the 2014 Budget and is slated to be abolished in 2017, although the Opposition has signalled that the levy may become permanent if it wins the election. Increasing the income tax threshold is aimed at combating so-called "bracket creep".

CORPORATES
AUSTRALIAN LABOR PARTY

Tax crackdown to hit profit shifting

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Original article by Joanna Mather
The Australian Financial Review – Page: 1 & 2 : 19-Apr-16

The Australian Government is expected to make changes to thin capitalisation rules in order to curb multinational tax avoidance. The changes, to be announced in the May 2016 Budget, would reduce the amount of debt which multinational companies are allowed to take through their Australian operation from 60 per cent to 50 per cent. The reduction in the "safe harbour" debt-to-assets ratio could lead to accusations of discouraging foreign investment in Australia.

CORPORATES
PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, AUSTRALIAN LABOR PARTY, AUSTRALIAN GREENS, INTERNATIONAL TRANSPORT WORKERS’ FEDERATION, KPMG AUSTRALIA PTY LTD