Changes to the boost is now a Federal law – from June 2023
On 29 March 2022, as part of the 2022–23 Budget, the then government announced it would support small business through these new measures. The measures became law on 23 June 2023. The technology investment boost and skills and training boost for small businesses are now operational and must be applied.
Time to Boost!
Small business technology investment boost
Small businesses (with an aggregated annual turnover of less than $50 million) can deduct an additional 20% of the expenditure incurred for the purposes of business digital operations or digitising its operations on business expenses and depreciating assets such as portable payment devices, cyber security systems or subscriptions to cloud based services.
This measure applies to expenditure incurred in the period commencing from 7:30 pm AEDT 29 March 2022 until 30 June 2023. An entity can claim the boost for expenditure on a depreciating asset only if the asset is first used, or installed ready for use, by 30 June 2023.
An annual $100,000 cap on expenditure will apply to each qualifying income year. Businesses can continue to deduct expenditure over $100,000 under existing law.
Eligible expenditure may include, but is not limited to, business expenditure on:
digital enabling items – computer and telecommunications hardware and equipment, software, internet costs, systems and services that form and facilitate the use of computer networks
digital media and marketing – audio and visual content that can be created, accessed, stored or viewed on digital devices, including web page design
e-commerce – goods or services supporting digitally ordered or platform-enabled online transactions, portable payment devices, digital inventory management, subscriptions to cloud-based services and advice on digital operations or digitising operations, such as advice about digital tools to support business continuity and growth
expenses that form part of your trading stock costs.
Small business skills and training boost
Small businesses (with an aggregated annual turnover of less than $50 million) will be able to deduct an additional 20% of expenditure that is incurred for the provision of eligible external training courses to their employees by registered providers in Australia. Businesses may continue to deduct expenditure that is ineligible for the bonus deduction in accordance with the existing tax law.
The expenditure must be:
for the provision of training to employees of your business, either in-person in Australia, or online
charged, directly or indirectly, by a registered external training provider that is not you or an associate of yours
already deductible for your business under taxation law
incurred within a specified period (between 7:30 pm AEDT or by legal time in the ACT on 29 March 2022 and 30 June 2024).
The bonus deduction is available for expenditure for the provision of training to one or more employees of your business. The training provider must meet certain registration criteria for the bonus deduction.
You cannot claim the following expenses towards the boost:
training of non-employee business owners such as sole traders, partners in a partnership or independent contractors
costs added on an invoice by an intermediary on top of the cost of training, such as commissions or fees, as they are not charged directly or indirectly by the registered training provider.
If you have any questions regarding these coming changes – de Kretser is here for you.
Need more information? If you need assistance understanding how the comparison information relates to your circumstances, we are here to help, so please contact us for further information.
The State Taxation Acts Amendment Act 2023 received Royal Assent on 27 June 2023. The Act introduces measures announced in the 2023–24 Victorian Budget and makes amendments to various state taxation acts.
2023–24 Budget measures:
Business insurance duties
These will be abolished over 10 years by reducing the rate of duty (currently 10%) by 1 percentage point each year from 1 July 2024. ‘Business insurance’ refers to policies taken out by businesses covering public and product liability, professional indemnity, employers’ liability, fire and industrial special risks, marine and aviation insurance.
Special disability trust (SDT) duty exemption
The Duties Act 2000 has been amended from 1 July 2023 to increase the property value threshold for this duty exemption from $500,000 to $1.5 million where the property will be used and occupied as the principal place of residence of the principal beneficiary of the SDT. If the value exceeds $1.5 million, duty will be assessed on the amount that exceeds the new threshold.
New duty exemption for a transfer of land to a person with a disability
The Duties Act 2000 has been amended from 1 July 2023 to introduce an exemption for a transfer of property from an immediate family member to a person with a disability who would be eligible to be a principal beneficiary of a SDT even if an SDT has not been established. The exemption is available from 1 July 2023 for properties valued up to $1.5 million.
Pensioner and concession cardholder duty exemption and concession
The Duties Act 2000 has been amended from 1 July 2023 to increase the property value thresholds to $600,000 for the exemption and $750,000 for the concession. The benefit applies against the full duty chargeable on the purchase. Additional eligibility criteria including a residence requirement has been introduced.
‘COVID debt’ repayment plan – land tax
The Land Tax Act 2005 has been amended to introduce a temporary land tax surcharge from the 2024 land tax year, expiring after 10 years. Properties exempt from land tax will also be exempt from the surcharge.
For taxable landholdings between $50,000 and $100,000, a $500 flat surcharge will apply.
For taxable landholdings between $100,000 and $300,000 (or $250,000 for trusts), a $975 flat surcharge will apply.
For taxable landholdings over $300,000 (or $250,000 for trusts), a $975 flat surcharge will apply plus an increased rate of land tax by 0.10 percentage points.
Absentee owner surcharge (AOS)
The Land Tax Act 2005 has been amended to increase the AOS rate from 2% to 4% and reduce the tax‑free threshold for non-trust absentee owners from $300,000 to $50,000, from the 2024 land tax year.
New land tax exemption for land owned by an immediate family member of a person with a disability
The Land Tax Act 2005 has been amended to introduce an exemption for land owned by an immediate family member of a qualifying person with a disability, where that person would be eligible to be a principal beneficiary of an SDT. The property must be used and occupied as the qualifying person’s principal place of residence for no consideration.
New land tax exemption for land protected by a conservation covenant with Trust for Nature (Victoria).
The Land Tax Act 2005 has been amended to introduce an exemption for land protected by a conservation covenant with Trust for Nature (Victoria), from the 2024 land tax year.
Land tax exemption for construction or renovation of a principal place of residence
The Land Tax Act 2005 has been amended to provide the Commissioner with a discretion to extend the exemption for up to 2 additional years where additional time is required to complete construction due to builder insolvency. This commences from the 2024 land tax year.
Workcover
Businesses will pay an average of 1.8 per cent of remuneration under the scheme from July 1, up from 1.27 per cent. The WorkCover premium is 1.23 per cent in Queensland and 1.48 per cent in NSW.
Eligibility for mental injury claims in Victoria will also be adjusted, with workers suffering stress and burnout no longer able to access weekly WorkCover benefits. They will instead be eligible for provisional payments for 13 weeks to cover medical treatment, along with access to enhanced psychosocial support services.
‘COVID debt’ repayment plan – payroll tax
The Payroll Tax Act 2007introduces a temporary payroll tax surcharge to commence from 1 July 2023, expiring after 10 years. The surcharge applies to employers who pay Australia wide wages of $10 million or more for a financial year and will be payable on Victorian wages above the relevant threshold.
A surcharge of 0.5% will apply to businesses with national payrolls above $10 million.
Businesses with national payrolls above $100 million will pay an additional 0.5%.
Annual payroll tax-free threshold
The Payroll Tax Act 2007 is amended to increase the annual payroll tax-free threshold from $700,000 to $900,000 from 1 July 2024 and from $900,000 to $1 million from 1 July 2025. From 1 July 2024, the allowable deduction will also be phased out for employers with annual wages between $3 million and $5 million, with no allowable deduction once annual wages exceed $5 million.
Payroll tax exemption for high-fee non-government schools
The Payroll Tax Act 2007 is amended from 1 July 2024 to limit the application of the payroll tax exemption to schools that the Minister for Education, in consultation with the Treasurer, declares to be exempt. In determining which schools will be exempt, the Minister for Education will take into account the fees and charges imposed, financial contributions received and any other matter that the Minister for Education considers appropriate.
The Minister for Education’s declaration dated 29 June 2023 is available online.
Other amendments
Corporate collective investment vehicles (CCIV)
The Duties Act 2000, Land Tax Act 2005 and Payroll Tax Act 2007 are amended in response to the introduction of CCIVs under Australian Government reforms.
Each sub-fund of a CCIV will be deemed as equivalent to a separate unit trust scheme for duties and land tax purposes.
Consistent with Federal treatment, regulate and tax a CCIV as if it were a trustee, the property of each sub-fund will be treated as trust property and the members of each sub-fund will be treated as beneficiaries or unit holders of the trust for duties and land tax purposes.
Amounts paid or payable by a CCIV to its corporate director will be excluded as wages for payroll tax purposes.
Fire services property levy – refunds and cancellation of assessments
The Fire Services Property Levy Act 2012 is amended to clarify that the ability of collection agencies to refund or cancel fire services property levy payments for mistakes or errors does not apply if the error, or grounds on which a person believes they have made an overpayment, is covered by a ground of objection under the Valuation of Land Act 1960.
Payroll tax rates
The Payroll Tax Act 2007 is amended to ensure the payroll tax rates for 2021-22 year continue to apply for future tax years. The amendment will apply retrospectively from 1 July 2022 to confirm the annual payroll tax rates that apply for the 2022-23 financial year.
Growth areas infrastructure contribution (GAIC)
The Planning and Environment Act 1987 and the Subdivision Act 1988 are amended to:
Introduce a new GAIC event for a plan of subdivision that does not require a statement of compliance to be issued.
Exclude a dutiable transaction that arises because of the operation of the economic entitlement provisions under the Duties Act 2000 from being a GAIC event.
Abolish the GAIC Hardship Relief Board.
Update GAIC exemptions to reflect changes to exemptions in the Duties Act 2000.
Prevent GAIC from being apportioned from a parent lot to any child lot wholly outside the contribution area, where the parent lot is partly inside and outside the contribution area.
Windfall gains tax (WGT) and valuation objections
The Taxation Administration Act 1997 and Valuation of Land Act 1960 are amended to clarify the scope of objections lodged to valuations of land used in an assessment of WGT.
The amendments require a taxpayer to object to both valuations of land used to calculate value uplift for the purposes of windfall gains tax, even if the grounds for the objection relate to only one of those valuations and provide councils discretion to adopt an amended valuation that results from a windfall gains tax objection.
Statute law revisions
Various statute law revisions are made to the Duties Act 2000, Land Tax Act 2005 and Payroll Tax Act 2007.
If you have any questions regarding these coming changes – de Kretser is here for you.
Need more information? If you need assistance understanding how the comparison information relates to your circumstances, we are here to help, so please contact us for further information.
