The Government of Australia works out the new tax system models

22.03.2012

On 14 March 2012 the Deputy Prime Minister Julia Gillard announced that the Government would amend the Income Tax Rates Act 1986. Currently the corporate tax has a floating rate, which is implemented on the basis of the state budget approved by the Parliament. For 2013, 2014 and for subsequent income years the corporate tax rate will be reduced from 30% to 29%.

In respect of small business companies the 29%-rate will be applied starting from the current income year. Moreover for such companies it will be provided the fast tax write-off in case of assets purchasing subject to the cost of this assets should be up to 5 000 Australian dollars (about 4,6 thousand US dollars).  

Expert’s opinion

«The planned corporate tax rate reduction will allow small and medium business companies to make their development high-profile. The corporate tax rate of 29% couldn’t be considered as a low rate, but the reduction is a smart way for securing investment. Most probably it is only the first step towards the promised changing of tax system. From the other side, the corporate tax rate amendment in respect of the large companies wouldn’t affect to the financial indicators of the latters.

Moreover within the reorganization the was suggested the idea of implementation the extra-profit tax in respect of coal mining and energy companies with the rate of 40%». 

On the basis: www.treasury.gov.au

Irina Lomakina ( the director of Moscow office of Honest & Bright )