Australia: Legislation on taxation of general insurers passes Parliament
Would reduce income tax compliance burden on general insurance industry
June 26, 2024
Parliament on June 25, 2024, passed Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023, which would reduce the income tax compliance burden on the general insurance industry caused by the misalignment between the income tax law and the adoption of the new AASB 17.
The legislation would be effective January 1, 2023, and would:
- Increase the instant asset write-off threshold from $1,000* to $20,000
- Provide small and medium businesses (with an aggregated annual turnover of less than $50 million) with access to 20% bonus deduction for assets that support electrification or more efficient energy use
- Facilitate certain community charities achieving deductible gift recipients (DGR) status
- Amend the income tax law with respect to general insurance to provide broad alignment with the new accounting standard AASB 17
- Limit the amount of non-arm’s length income that arises relating to a general non-arm’s length expense
- Reinstate the Australian Financial Complaints Authority’s jurisdiction to hear complaints relating to superannuation
The legislation now awaits Royal Assent.
*$=Australian dollar