With a new government there are bound to be changes to tax legislation. Some of the coalition’s stated policies which may come into effect are:

  • Reduce the company tax rate from 30% to 28.5% from 1 July 2015
  • Impose a 1.5% paid parental leave levy on companies with taxable income exceeding $5 million
  • Scrap the immediate depreciation claim for small businesses purchasing assets with a cost of $6,500 or less (will revert to immediate claims for assets costing $1,000 or less)
  • Scrap the upfront $5,000 depreciation claim on purchase of vehicles
  • Scrap the loss carry-back rules under which a company that makes a loss can claim back tax it has paid from prior years when it made a profit
  • No change to the FBT rules on vehicles (Labor had proposed to abolish the ‘statutory formula’ method)
  • No change to self-education expenses (Labor had proposed to limit annual deductions to $2,000)
  • Defer by two years the increase in compulsory employer superannuation (so will remain at 9.25% until 1 July 2015)
  • Abolish the carbon and mining taxes

Some of the changes will have favourable tax consequences and some negative for businesses and superannuation funds. As so many rules have changed over the last few years, we recommend discussing major business decisions with our team before entering into transactions in order to ensure the tax consequences are understood.