The Tax and Superannuation Laws Amendment (2014 Measures No 4) Bill 2014 was introduced in the House of Reps on Thur 17.7.2014. It makes the following amendments:
- THIN CAP: (i) tightens the debt limit settings in the thin capitalisation rules to ensure that multinationals do not allocate a disproportionate amount of debt to their Australian operations eg reduces the maximum statutory debt limit from 3:1 to 1.5:1 (on a debt-to-equity basis) for general entities and from 20:1 to 15:1 (on a debt-to-equity basis) for non-bank financial entities; (ii) increases the de minimis threshold to $2m to minimise compliance costs for small businesses; and (iii) introduces a new worldwide gearing debt test for inbound investors.
- FOREIGN DIVIDENDS: rewrites and reforms the existing s 23AJ exemption for foreign non-portfolio dividends into the ITAA 1997 eg the exemption will apply where an Australian corporate tax entity holds a participation interest of at least 10% in a foreign company.
- FOREIGN RESIDENTS AND CAPITAL GAINS: amends the ITAA 1997 to ensure that the foreign residents CGT regime operates as intended by preventing the double counting of certain assets under the Principal Asset Test. A technical correction would also be made to the meaning of “permanent establishment” in s 855-15 of the ITAA 1997.
- TAX RECEIPTS: would amend the tax law to provide greater transparency to taxpayers about how their tax money is spent, by requiring the Commissioner of Taxation to issue a tax receipt to individuals for the income tax assessed to them.
- MISC AMENDMENTS: amendments include style changes, the repeal of redundant provisions, and the correction of anomalous outcomes and corrections to previous amending Acts.
[LTN 136, 17/7/14]