Australia: Update on recent tax legislative developments

The current federal government has proposed various tax measures since it came to office in May 2022, and Parliament has recently passed several tax-related bills which now await Royal Assent, including:

• Pillar Two global minimum tax rules (read TaxNewsFlash)
• Public country-by-country (CbC) reporting (read TaxNewsFlash)
• Build-to-rent (BTR) measures (read TaxNewsFlash)
• Increase in foreign resident capital gains withholding rate from 12.5% to 15%

There are some tax bills remaining in Parliament, including one introducing the new hydrogen production and criterial minerals production tax incentives, which was passed by the House of Representatives and has been referred to the Senate Economics Legislation Committee. Read TaxNewsFlash

There are also a number of proposed tax measures for which public consultation has been undertaken, including proposed changes to the foreign resident capital gains tax rules. Read TaxNewsFlash

Finally, there are several proposed measures that have not progressed beyond the announcement stage, including:

• Expansion of the Part IVA general anti-avoidance rule to cover schemes that reduce tax paid in Australia by accessing a lower withholding tax rate on income paid to foreign residents, and schemes that achieve an Australian tax benefit where the dominant purpose of the scheme was to reduce foreign income tax
• Introduction of a new penalty for large taxpayers that are found to have mischaracterized or undervalued royalty payments on which royalty withholding tax would otherwise apply
• Extension of the clean building managed investment trust withholding tax concession to data centers and warehouses when construction starts after 7:30pm AEST on May 9, 2023

What happens in 2025?

Australian Parliament has finished sitting for 2024, and while Parliament is proposed to sit again in February 2025, given the possible timeframe for the next federal election, it could be that no further sitting weeks occur prior the election. As such, whether any of the above unenacted bills substantively progress through Parliament before the election is not yet clear.
 

For further information, contact a KPMG tax professional:

Alia Lum | alum@kpmg.com.au

Amanda Maguire | amaguire@kpmg.com.au