Private companies and SMEs kept waiting on tax reform
Deloitte Federal Budget media releaseDOWNLOAD
Tuesday 14 May: Private companies and SMEs read with anticipation page 10 of the tax reform road map “Cutting tax and red tape for small business”. Sadly, the measures outlined were depreciation and R&D measures that are already in place.
The Budget is silent on tax reform for private companies and SMEs. Issues such as simplification for trusts, clarification of the deemed dividend rules and a simplified tax system are not mentioned. Private companies will need to wait for further announcements on these topics.
The government announced in a separate press release that it supports consolidation simplifications for company groups with less than $50 million of revenue. However there is no commitment to implement the changes and no time line for when they may be introduced.
“Once again private companies and SMEs will need to wait for tax simplification,” said Deloitte Private Tax Partner David Pring.
On a positive note, the government confirmed its commitment to the loss carry back rules announced in last year’s Budget. These rules will allow companies to offset up to $1 million current year losses against prior year profits, allowing a benefit of up to $300,000.
“These rules have not yet been passed and it is hoped that they will be passed in this sitting of Parliament so that companies will have certainty that the rules will be implemented,” added Mr Pring. .
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