Income Tax Rates 2017

Personal income tax changes

What are the proposed changes?

Table 1 shows both the current and proposed personal income tax rates for Australian tax residents.

Table 1: Current and proposed personal marginal income tax rates, $p.a.
CurrentFrom 1 July 2016
Taxable Income Rate %Taxable IncomeRate %
0–18,200Nil0–18,200Nil
18,201–37,0001918,201–37,00019
37,001–80,00032.537,001–87,00032.5
80,001–180,0003787,001–180,00037
180,001 and over45180,001 and over45

 

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Tax Deferred or Avoided

If a tax debt was paid late (deferred) rather than permanently avoided, there may be scope to remit the penalty in full or in part. The level of remission would be unfair by the period of delay and any tax avoided as a result of the deferral.

For example, a taxpayer may account for their GST on the wrong activity statement (that is, in the wrong period). After the amendments, if there is no loss amount in overall terms, the penalty may be remitted in full.

Likewise, if a deduction or credit is claimed in the wrong taxpayer’s return or activity statement but there is no shortfall amount in overall terms, a penalty may be remitted in full. If the two taxpayers have different tax rates there will be unlike shortfall amounts for each taxpayer and a net overall shortfall amount. Where this happens the penalty may be remitted so that it equals the penalty that would be applied to the net overall shortfall.

A tax-deferred scheme allows an employee to defer paying tax in relation to their ESS interests until the income year in which the deferred taxing point occurs, instead of paying tax in the year the interests are acquired. To be able to defer tax, both the system and the employee must meet the general conditions as well as the specific circumstances for each type of tax-deferred scheme. If you give employees ESS interests under a tax-deferred scheme, they will be assessed in the year that the deferred taxing point occurs. The amount assessed will be the market value of the ESS interests at the deferred taxing point, reduced by the cost base.

For more information on Etax, myTax ATO and online tax return, please contact us at 1300768284 or you can email us at enquiry@taxrefundonspot.com.au