A number of additional measures were also announced by the Government in the 2021-22 Federal Budget.
From an international perspective:
- $6 million in funding for the Treasury and Australian Taxation Office (ATO) to accelerate the program of tax treaty negotiations.
- The Government will ensure New Zealand maintains its primary taxing right over sporting teams and support staff in respect of Australian income tax and fringe benefits tax (FBT) liabilities that arise from exceeding the 183-day test in the Australia-New Zealand double tax agreement as a result of being located in Australia for league competitions because of COVID-19 (applicable to the 2020-21 and 2021- 22 income and FBT years).
- Updating the list of exchange of information counties to include Armenia, Cabo Verde, Kenya, Mongolia, Montenegro and Oman from 1 January 2022. Residents of listed jurisdictions are eligible to access the reduced Managed Investment Trust (MIT) withholding tax rate of 15 per cent on certain distributions, instead of the default rate of 30 per cent.
From a customs and trade perspective:
- An additional $5 million of funding over four years from the 2021-22 financial year as part of reforms to Australia’s anti-dumping regime to make the system faster and easier to navigate for businesses. The Government will also streamline existing processes by allowing eligible importers to claim a Tariff Concession Order based exemption from anti-dumping duties at the time they make their import declaration.
- Increase the heavy vehicle road user charge from 25.8 cents per litre to 26.4 cents per litre from 1 July 2021. As the Road User Charge is collected via the Fuel Tax Credit System, it will result in a decrease in Fuel Tax Credit entitlements for business operating fleets of heavy on-road vehicles.
- Measures to reduce costs for importers and exporters, as well as improving biosecurity and other border risk management outcomes, including additional funding of measures aimed at improving the efficiency of Australian international and domestic supply chains for the modernisation of biosecurity ICT systems, technology and data analytics.
- The Government has identified enhanced support for global trade with the aim of export market diversification as a key priority for the 2021-22 Budget. This includes enhanced trade capabilities to maximise economic opportunities and diversify export markets, further support for food and agriculture exporters to maintain, diversify or expand their global markets through an Agri Business Expansion Initiative, and new funding to develop a comprehensive Global Resource Strategy to support export market diversification for Australian resources sector. These measures appear aimed at countering volatility and a reliance on the Australia-China trade relationship.
And more generally:
- Extension of the existing 50 per cent wage subsidy program for new apprentices and trainees employed from 5 October 2020 to 31 March 2022. The measure will uncap the number of eligible places and increase the duration of the subsidy to 12 months from the date an apprentice or trainee commences with their employer.
- The Producer Tax Offset will be retained at the 40 per cent rate for feature films with a theatrical release. The Government will not proceed with the rate reduction to 30 per cent as announced in last year’s Federal Budget.
- Income tax exemption for qualifying grants made to primary producers and small businesses affected by the storms and floods in Australia between 19 February 2021 and 31 March 2021.
- Impose a temporary levy on offshore petroleum production to recover costs of decommissioning the Laminaria-Corallina oil fields and associated infrastructure. The levy will terminate on 30 June of the year in which all costs associated with the decommissioning have been recovered.
- $1.9 million in funding in the 2022-23 financial year to the ATO to build an online system to enhance the transparency of income tax exemptions claimed by not-for-profit entities (NFPs). In addition, from 1 July 2023, the ATO will require income tax-exempt NFPs with an active Australian Business Number (ABN) to submit online annual self-review forms with the information ordinarily used to self-assess their eligibility for an income tax exemption.