Individuals
- The threshold at which the 37 per cent marginal tax rate for individuals commences will increase from taxable incomes of $80,000 to $87,000 from 1 July 2016.
Personal income tax rates and thresholds
| 2015-16 | 2016-17 | |||
|---|---|---|---|---|
| Threshold | Rate | Threshold | Rate | |
| 1st rate | $0 – $18,200 | 0% | $0 – $18,200 | 0% |
| 2nd rate | $18,201 – $37,000 | 19.0% | $18,201 – $37,000 | 19.0% |
| 3rd rate | $37,001 – $80,000 | 32.5% | $37,001 – $87,000 | 32.5% |
| 4th rate | $80,001 – $180,000 | 37.0% | $87,001 – $180,000 | 37.0% |
| 5th rate | $180,001 | 47.0% | $180,001 | 47.0% |
Small and Medium Business
- The small business entity annual turnover threshold will be increased from $2 million to $10 million from 1 July
- For the income year of 2016-17, the company tax rate for businesses with an annual aggregated turnover of less than $10 million will be reduced to 27.5 per cent.
- By 2026-27, it is proposed that the company tax rate will fall to 25 per cent for all companies
- The unincorporated small business tax discount will be increased in phases over 10 years from the current 5 per cent to 16 per cent, first increasing to 8 per cent on 1 July 2016. The current cap of $1000 per individual for each income year will be retained.
- GST reporting requirements for small businesses will be simplified from 1 July 2017.
Superannuation
- The threshold at which high income earners pay additional contributions tax (30%) will be lowered from $300,000 to $250,000 from 1 July 2017.
- The concessional contributions limits are to be reduced to a flat $25,000 per year from 1 July 2017.
- The tax exemption on earnings of assets supporting Transition to Retirement Income Streams will be removed from 1 July 2017.
- A lifetime non-concessional contributions cap of $500,000 will be introduced. Currently individuals can make contributions of their own, after-tax money into superannuation of up to $180,000 per year, in addition to the normal ‘concessional’ or tax deductible contributions they might make. This system is being scrapped in favour of a single lifetime cap of $500,000, which will take into account all non-concessional contributions made since 1 July 2007.
- The current restrictions on people aged 65 to 74 making superannuation contributions for their retirement will be removed from 1 July 2017.
- Individuals with a superannuation balance less than $500,000 will be allowed to make additional concessional contributions where they have not reached their concessional contributions cap in previous years, with effect from 1 July 2017.
- From 1 July 2017 all individuals up to age 75 will be allowed to claim an income tax deduction for personal superannuation contributions.
- A low income superannuation tax offset (LISTO) will be introduced to reduce tax on superannuation contributions for low income earners. Low income earners who are below the tax free threshold find that contributions made into superannuation incur a tax rate of 15 percent, so it actually costs them to put money into superannuation. From 1 July 2017, up to $500 of this cost will be available as a tax offset for those with an adjusted taxable income of less than $37,000.
- The income threshold for the receiving spouse (whether married or de facto) of the low income spouse tax offset will be increased to $37,000 from 1 July 2017.
- A balance cap of $1.6 million on the total amount of accumulated superannuation an individual can transfer into the tax-free retirement phase will be introduced from 1 July 2017.
- The anti-detriment provision in respect of death benefits from superannuation will be removed from 1 July 2017.
GST and other indirect taxes
- GST will be extended to low value goods imported by consumers from 1 July 2017.
- A discussion paper on the “double taxation” of digital currencies under the GST regime has been released.