The new financial year typically brings a number of important changes for business, individuals and the economy as a whole. Here’s a summary of the key things to remember from 1 July 2017:
- GST applies to digital products & services imported by consumers
- Small business $20k instant asset write-off extended until 30 June 2018
- Company tax rate reduction to 27.5% for entities with an aggregated turnover of less than $25m (companies with a turnover of less than $10m have been subject to this tax rate since 1 July 2016)
- Major bank levy introduced
- 2% temporary debt tax removed from high income earners
- Plant & equipment deductions limited for residential property investors (not yet legislated)
- Residential property investors no longer able to claim travel expenses (not yet legislated)
- First home saver scheme begins (not yet legislated).
Business owners should also note that numerous Superannuation reforms came into effect on 1 July. These reforms include:
- Cap on concessional contributions (before tax) reduces to $25,000 for everyone
- Cap on non-concessional contributions (after tax) reduces to $100,000
- $1.6 million transfer balance cap limits how much money a member can transfer into or hold in a tax-free pension account. Excess amounts are subject to a transfer balance tax
- Threshold to access the tax offset for contributions to a spouse increased to $37,000 (partial offset available up to $40,000)
- Threshold for low income super tax offset increased to $37,000
- The threshold at which high-income earners pay Division 293 tax on their concessionally taxed superannuation contributions reduced to $250,000 (from 300,000).