Australia tax news 2025
February 2025While it's still early in the year and major tax changes often happen closer to the budget, here are some of the most important tax-related news and updates for Australia in 2025 so far:
1. Changes to Foreign Resident Capital Gains Withholding:
Increased rate: The withholding tax rate for foreign residents selling Australian property has increased from 12.5% to 15%.
Removal of threshold: The $750,000 threshold for withholding has been removed.
This means that all sales of taxable Australian property by foreign residents are now potentially subject to withholding, regardless of the property's value.
Impact: This change will affect foreign investors in Australian property and requires careful attention from vendors and purchasers to ensure compliance.
2. ATO Focus on Division 7A:
Debunking myths: The Australian Taxation Office (ATO) is actively addressing common misunderstandings about Division 7A of the tax law, which deals with loans and payments from private companies to shareholders and their associates.
Key message: The ATO is emphasizing that these transactions are subject to scrutiny and that proper documentation and repayment arrangements are crucial to avoid tax consequences.
Importance: This is a reminder for business owners to be aware of the rules around Division 7A and to ensure their company's financial dealings with related parties are compliant.
3. Rental Bond Data-Matching Program:
ATO access to data: The ATO is collecting rental bond data from state and territory regulators to identify landlords who may not be meeting their tax obligations.
Scope: This program will run for the 2024 to 2026 income years and will involve the ATO matching this data with information provided in tax returns.
Relevance: Landlords should ensure they are correctly declaring their rental income and expenses to avoid issues with the ATO.
4. Updates on Study/Training Loans:
Indexation changes: Changes have been made to the indexation of study and training loans (HECS-HELP, VET Student Loans, etc.), with the new indexation rate backdated to 1 June 2023.
Impact: This will affect the amount of debt accrued by students and trainees.
5. Superannuation Updates:
SMSF annual returns: The due dates for Self-Managed Super Fund (SMSF) annual returns vary depending on whether the fund is newly registered, has overdue returns, or uses a tax agent.
Key dates: It's important for SMSF trustees to be aware of the relevant lodgment deadlines to avoid penalties.
Important Notes:
Tax laws are subject to change: The information above is based on current information, but tax laws can be amended. It's essential to stay updated on any further announcements or changes. Seek professional advice: This information is general in nature and not personalized tax advice. If you have specific circumstances or require clarification, consult with a qualified tax professional. I recommend keeping an eye on the ATO website (www.ato.gov.au) and reputable tax news sources for the latest updates and detailed information.
Small business energy incentive
July 2023On 30 April 2023, the Australian Government announced it will provide businesses with an annual turnover of less than $50 million with an additional 20% deduction on spending that supports electrification and more efficient use of energy.
Australia's 2013 Budget
June 2013Australia's 2013 budget delivered on May 14, 2013 includes several tax measures aimed to finance social reform programs.
The tax measures include inter –alia strengthening of the capital gain tax regime for non- residents, deferral of planned personal tax cuts to the future and widening the tax base of corporate income tax.
Australia Turkey Double Tax Treaty
May 2010Australia and Turkey signed on April 28, 2010 the first DTA, Double Tax Treaty, between the two countries.
The DTA which is expected to boost economic cooperation includes, inter alia, reduction of cross border tax withholding rates from payments of dividend, interest and royaltis and also allows exchange of tax information.
The DTA will come into force after ratification procedures by both countries.
Australia Chile free Trade Agreement
February 2009Australia and Chile signed a free trade agreement, FTA, which will come into force on 6 March 2009.
The minister for trade, Simon Crean welcomed the agreement, declaring that it is the most comprehensive outcome on goods in any FTA that Australia has negotiated with another agricultural producing country since the Closer Economic Relations agreement with New Zealand signed in 1983.
The agreement immediately removes Chile's tariffs on almost 92% of tariff lines, covering 97% of goods currently traded.
This includes Australian coal, meat, wine, dairy exports and other industrial goods.
Tariffs on all existing merchandise trade will be eliminated by 2015.
For more information see Trade Focus by Australian department of foreign affairs and trade www.dfat.gov.au
Note: The information in this site is for general guidance only. Users of this site are advised to take professional advice before taking practical tax decisions.
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