Extending Part IVA Anti-Avoidance Rules

The Part IVA anti-avoidance rules will be extended so that they can apply to:

  • Schemes that minimise the tax paid by using a lower withholding tax rate on income that is being paid to foreign residents.
  • Schemes that get an Australian income tax benefit.

Regardless of when the scheme was entered into, it will be enforced for income years commencing on or after July 1, 2024.

AAT to be Replaced

A new federal administrative review body will replace the Administrative Appeals Tribunal. Funding has been offered to hire new members to the AAT to identify the backlog, handle the transition, to develop a modern case management system for the new body.

Small Business ATO Compliance

A set of measures aimed at reducing the administrative burden on small businesses involves a range of initiatives that target the reduction of paperwork:

  • Small businesses can allow their tax agent to file various single touch payroll forms on their behalf from 1 July 2024.
  • From 1 July 2024, the ATO will minimise the usage of cheques for income tax refunds.
  • From 1 July 2025, small businesses will be allowed up to 4 years to modify their income tax returns.

Owners of Rental Properties and Personal Income Tax Compliance are Being Examined

Over the next two years, the Australian Taxation Office (ATO) will receive $89.6 million while the Treasury will receive $1.2 million to continue and broaden the personal income tax compliance program, which will focus on addressing emerging issues.

Reducing Tax and Super Liabilities

The treasury and the ATO will be funded to identify the growth in tax and super liabilities. The focus is on:

  • high-value debts of more than $100,000
  • Debts that are more than two years old, for which the taxpayers in question are either:
    • multinational and public groups with a total turnover of more than $10m, or
    • privately owned groups over $5m of net worth.

GST Compliance Program Extended

To improve GST compliance, the ATO will get more than $588m over 4 years to continue its work. According to projections, the measure is expected to result in a $7.6bn increase in receipts and a $3.8bn optimisation of payments between 2022-23 and the following five years.

Extension and Merging of Serious Financial Crime Taskforce and Serious Organised Crime Program

Funding for the Serious Financial Crime Taskforce and Serious Organised Crime Program will be extended for four years, until June 30th, 2027, by the government. They will merge the programs into a new SFCT beginning on July 1st, 2023.

Anti-Slavery Commissioner

An anti-slavery commissioner will be established to work across government, society, and industry to support compliance with the Modern Slavery Act 2018, enhancing the transparency of supply chains.

Support for SMEs and Startups

A program with $392.4 million will assist SMEs and start-ups, particularly those in the National Reconstruction Fund, to commercialise their ideas and expand their operations. An extra $39.6 million will also help SMEs connect with the Government through the Single Business Service.

Cybersecurity Funding

To provide protection against cyber threats, the Council of Small Business Organisations Australia (COSBOA) will support small businesses to build in-house capability. Over 3 years, $23.4m has been offered from 2023-24.

Disruptive Defence Technology Funding

To establish the ‘Advanced Strategic Capabilities Accelerator’, $3.4bn has been given to the Department of Defence over 10 years.

Direct Pathways for Kiwis to Become Australian Citizens

From July 1, 2023, New Zealand citizens in Australia with a non-protected Special Category visa (subclass 444) can apply for Australian citizenship directly without having to first become permanent residents, as long as they meet the required residency and eligibility criteria.

Reintroduction of Work Hour Cap on International Student Visa Holders

A work cap of 48 hours per fortnight will be reinstated from 1 July 2023. Until December 21, 2023, international students employed in the aged care industry will not be subject to the cap.

International Student Post-Study Work Rights Extended

The government will grant additional two years of post-study work rights to international students of Australian institutions with eligible qualifications.

Increase in Wage Expectations Temporary Skilled Workers

Employers need to meet certain salary and employment condition requirements if they want to nominate workers for subclass 482, 186, and 187 visas. If a worker will be paid less than $250,000, employers must prove that overseas workers will get paid at least the Temporary Skilled Migration Income Threshold (TSMIT). The minimum salary threshold for Temporary Skilled Migration Income (TSMIT) will increase from $53,900 to $70,000.

Visa Application Rates Increase

From 1 July 2023, rates of visa applications will increase by:

  • for visa applications, charges will be increased by 6%
  • 15% points for select visitor and temporary visa subclasses
  • 40% will be for business innovation and investment visas
$1bn to Boost Biosecurity

Australia will spend $1bn over 4 years to improve biosecurity policy and implementation, including digital systems in cargo pathways and reducing biosecurity risks in Northern Australia. This will be partly funded by higher costs for clearing low-value imported cargo and a biosecurity protection levy on domestic producers of agricultural, forestry, and fishery products starting from 1 July 2024.