Australia: Tax announcements in government's 2023-2024 mid-year economic and fiscal outlook statement

The government’s 2023-2024 mid-year economic and fiscal outlook statement included a limited number of new tax-related announcements:

• Deductions for Australian Taxation Office (ATO) charges, specifically general interest charge and shortfall interest charge, incurred in income years started on or after 1 July 2025 generally will be denied.
• The foreign resident capital gains withholding tax rate will increase to 15% (from 12.5%), and the withholding threshold will be reduced to zero (from $750,000), for real property disposals with contracts entered into from 1 January 2025.
• The definition of fuel-efficient vehicles will be tightened by reducing the maximum fuel consumption to 3.5 litres (from 7 litres) per 100km, and the indexation rate for the luxury car tax value threshold for all other luxury vehicles will be updated from 1 July 2025.
• The Commonwealth penalty unit will increase in value to $330 (from $313), commencing four weeks after passage of legislation, which will increase the maximum failure to lodge penalty for significant global entities to $825,000* (from $782,000).

Previously announced changes to the 2022–2023 October budget multinational tax integrity package were also noted in the statement:

• Amendments to the proposal to deny deductions for payments relating to intangibles held in low-or no-tax jurisdictions would better target the measure (no further detail was provided).
• The state date for public country-by-country reporting would be deferred from 1 July 2023 to 1 July 2024, with further consultation on specific parameters, including the appropriate level of disaggregated reporting. Read TaxNewsFlash