• From the 2016/2017 financial year, the company tax rate for businesses with an annual turnover of less than $10M will be reduced to 27.5% (down from 28.5%).
• The maximum franking credit rate for a dividend will change in line with the company tax rate – 27.5% from the 2016/2017 financial year.
• The tax discount for unincorporated small businesses (such as sole traders and partners in a partnership) will be increased in phases over 10 years from the current 5% to 16%, first increasing to 8% on the 1 July 2016. The current discount will remain capped at $1,000 per individual per income year.

• The small business entity turnover threshold will be increased from $2M to $10M from 1 July 2016. Businesses that fall into this category gain access to a wide range of small business concessions, such as:

- Lower small business corporate tax rate (which will be reduced to 27.5% from 2016/2017 financial year);

- Immediate deductibility for various start-up costs (such as professional fees and government charges);

- The simplified trading stock rules, which give businesses the option to avoid an end of year stocktake if the value of the stock has changed by less than $5,000;

- The simplified depreciation rules, including immediate tax deductibility for asset purchases costing less than $20,000 until 30 June 2017;

- The option to account for GST on a cash basis and pay GST instalments as calculated by the ATO;

- More generous FBT exemptions for work-related portable electronic devices (such as mobile phones, laptops and tablets).

• The Government though, has indicated that the current $2M turnover threshold will be retained for the purpose of accessing the small business CGT concessions.
• From the 1 July 2016, individual taxpayers with business income and an annual turnover of less than $5M will be able to access the unincorporated small business discount – this is an increase from the current threshold of $2M.

• You will be able to account for GST on a cash basis from 1 July 2016, so long as your aggregate turnover is <$10M.
• GST will be extended to low value goods imported by consumers from 1 July 2017.
• Currently, GST is not imposed on the importation of goods into Australia which have a customs value of $1,000 or less – this exemption will be abolished from 1 July 2017.

• The change in the small business threshold to <$10M turnover will not apply for the purposes of determining eligibility for the small business CGT concessions.  These will continue to only be available for businesses with an annual turnover of <$2M, or have <$6M in assets.

• The average 32.5% personal income tax bracket has increased from $37,001 -$80,000 to $37,001 - $87,000, effective from 1 July 2016.
• The Medicare levy low-income thresholds for singles, families and single seniors and pensioners will be increased from the 2015/2016 income year, so that low-income taxpayers generally continue to be exempt from paying the Medicare Levy.
• The Treasurer has indicated that the 2% budget repair levy on individuals earning more than $180,000 per annum will not be extended beyond its initial three year term, and will cease at the end of the 2016/2017 financial year.

• The threshold at which Division 293 tax applies has been reduced from $300,000 to $250,000 from 1 July 2017. The rate of tax on any concessional contributions when your adjusted taxable income exceeds $250,000 is 30%.
• The annual cap on concessional contributions (deductible superannuation contributions) will be reduced to $25,000 from 1 July 2017 applicable to all individuals regardless of age – currently $30,000 under age 50 and $35,000 for ages 50 and over.

- From 1 July 2017, taxpayers will no longer have to show that less than 10% of their income came from employment, to be able to claim an income tax deduction for personal concessional contributions.

- Furthermore, individuals can now top up concessional superannuation contributions made by employers up to the maximum limit of $25,000, making salary sacrifice less attractive.

- From 1 July 2017, the work test for taxpayers age 65-74 will be abolished, allowing them to make tax deductible concessional contributions to super regardless of their age.

• A $500,000 lifetime cap for non-concessional contributions was introduced. The cap will replace the existing non-concessional contributions cap of $180,000 per year (or $540,000 every three years for individuals aged under 75).

- The lifetime cap will take into account all non-concessional contributions made on or after 1 July 2007 and will commence at 7:30pm on 3 May 2016;

- Individuals who have exceeded the $500,000 lifetime non-concessional contributions cap prior to budget night will not be penalised or required to remove the excess component from their superannuation savings.

• From 1 July 2017, individuals with superannuation balances less than $500,000 will be able to make additional concessional contributions where they have not reached their concessional contributions cap in previous years.

• From 1 July 2017, a transfer balance cap of $1.6M will be introduced on the total amount of accumulated superannuation an individual can transfer into the tax free retirement phase.

- A tax on amounts that are transferred in excess of the $1.6M cap will be applied, similar to the tax treatment that applies to excess non-concessional contributions;

- Members already in the retirement phase with balances above $1.6M will be required to reduce their retirement balance to $1.6M by 1 July 2017.

• The tax exemption on superannuation fund earnings on assets supporting Transition to Retirement Income Streams will be removed from 1 July 2017.
• A low income superannuation tax offset (LISTO) will be introduced to reduce tax on superannuation contributions for low income earners from 1 July 2017.

• A Tax Avoidance Taskforce will be established within the ATO to undertake enhanced compliance activities targeting multinationals, large public and private groups, and high wealth individuals.