The Tax Laws Amendment (Income Tax Rates) Bill 2012 was introduced in the House of Reps on Thur 24.5.2012. It amends the Income Tax Rates Act 1986 to align more closely the personal income tax rates for non-residents for Australian tax purposes with the personal income tax rates for Australian resident taxpayers, by:
- merging the first 2 personal marginal tax rate thresholds for non-residents into a single threshold; and
- aligning the rate for this new threshold to the second marginal tax rate for residents (32.5% from 1 July 2012, increasing to 33% from 1 July 2015).
As a result of the proposed changes, the tax rates for non-residents are:
| Taxable income $ | Tax payable $ |
| 0 – 80,000
80,001 – 180,000 180,001+ |
32.5% (2012-13); 33% (2015-16)
26,000 + 37% of excess over 80,000 63,000 + 45% of excess over $180,000 |
DATE OF EFFECT: These changes will apply for the 2012-13 and later income years.
[FJM Note: Previously, it was 29% up to $37,000 and 30% up to $80,000]
[LTN 99, 24/5]
Amendments passed by the Lower House
The Tax Laws Amendment (Income Tax Rates) Bill 2012 (which contains changes to non-resident tax rates) was passed by the House with amendments.
The amendments:
- reduce the $732 threshold amount to $663 as a result of the changes to the tax rates legislated to take effect from the 2012-13 year of income; and
- further reduce the threshold amount from $663 to $653 as a result of the changes to the tax rates legislated to take effect from 1 July 2015.
The effect is that, where the taxable income of a non-resident minor exceeds $416 but does not exceed $663, the amount of tax payable in respect of that income shall not exceed the sum of 32.5% of $416 and 66% of the amount by which that eligible taxable income exceeds $416 in the 2012-13, 2013-14 and 2014-15 income years. From 1 July 2015, where the taxable income of a non-resident minor exceeds $416 but does not exceed $653, the amount of tax payable in respect of that income shall not exceed the sum of 33% of $416 and 66% of the amount by which that eligible taxable income exceeds $416 in the 2015-16 and later income years.
[LTN 104, 31/5]