From the Institute of Chartered Accountants

On 24 October 2013, the Government released an exposure draft of the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 and explanatory memorandum for public consideration.  The government hopes to pass this Bill before the New Year.

The Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 removes the Minerals Resource Rent Tax with effect from 1 July 2014. The Bill also discontinues or re-phases the measures that were intended to be funded by the MRRT.  A number of these will affect small businesses:

• Company Loss Carry Back

The Government plans to repeal the loss carry back rules from 1 July, 2014. This measure allowed small businesses to apply business losses as a deduction against previous years’ profits, claiming a tax refund on tax paid in the previous financial year. As a result of the repeal, the only year that these rules will apply is for the financial year ended 30 June, 2013. Thereafter, companies will once again only be able to claim their carry losses as a deduction against future profits.

• Re-phasing the Superannuation Guarantee (SG) percentage increase

The SG percentage was to increase from 9.25% to 9.5% starting 1 July, 2014 gradually increasing to 12% by 1 July, 2019. The government has announced they will pause the SG at 9.25% and increase it to 9.5% from 1 July, 2016.

• Repeal of the low income superannuation contribution (LISC)

From 1 July, 2013 individuals earning up to $37,000 a year will no longer receive a refund for contributions tax paid on concessional contributions.

• Repeal of the income support bonus

The income support bonus paid twice annually to eligible social security recipients will be repealed. This will be repealed from the date of amendment.

• Repeal of the school kids bonus

The school kids bonus will be repealed. This will be repealed from the date of amendment.

For more information on any of the above changes, contact us on 07 3036 1600 or enquiries@aspire-ca.com.au.