Mining tax repeal Bill passed with amendments
The Abbott Government has delivered on one of its key election promises with the passing of the Minerals Resource Rent Tax Repeal and Other Measures Bill 2014.
The Bill provides for the following tax changes:
Loss carry-back provisions
Mining tax related loss carry-back provisions that enable companies making a tax loss of up to $1 million to recoup taxes paid on an equivalent amount of taxable income in a prior income year have been repealed.
Instant asset write-off threshold
Amendments have been made to the instant asset write-off threshold provisions, reducing the write-off amount from $6,500 to $1,000, effective from the income year in which proclamation occurs.
The single small business pool arrangements are preserved. Assets costing $1,000 or more will be allocated to the existing general small business pool and depreciated at a rate of 15% in the first year and 30% in subsequent years.
Motor vehicle purchases
Motor vehicle purchases made by small business entities will no longer be eligible for an accelerated deduction of $5,000. Motor vehicle purchases by small business entities using the simplified depreciation rules will instead be treated as normal business assets under the concessional capital arrangements.
The extension of the income tax exploration provisions to geothermal energy exploration has been repealed so that geothermal energy exploration and prospecting expenditure is not immediately deductible. A capital gains tax (CGT) rollover will apply in cases where a geothermal exploration right is merely exchanged for a geothermal extraction right relating to the same area.
Superannuation and other changes
The superannuation guarantee charge (SGC) rate will be paused at the 1 July 2014 rate (9.5%) and remain at that rate until 1 July 2021 when it will increase to 10%, and then by 0.5% every year until the rate reaches 12% on 1 July 2025.
The Low Income Superannuation Contribution has been abolished.
Repeals all future payments of the Income Support Bonus from a date fixed by proclamation following the passage of the Bill.
Repeal of the school kids bonus.
For further information or to discuss how these changes might impact you and your business, please speak with your local PKF Lawler contact.