Australia

Details

  • Service: Tax, Corporate Tax, Topics, Federal Budget
  • Type: Regulatory update
  • Date: 19/03/2014

Tax Insights

KPMG's analysis of tax issues and developments.

Louise Lovering

Louise Lovering
Partner, Corporate Tax

+61 3 9838 4690

llovering@kpmg.com.au

Jockeying for a slice of the May 2014 Budget 

by Louise Lovering, Corporate Tax Specialist

There is a trend developing in the lead-up to the May 2014 Budget, with industries independently positioning for a 'first mover advantage'. That is, unrelated sectors actively approaching Government to demonstrate why their industry is economically worthy of a tailored tax incentive independent of the White Paper.

For example:

 

Patent-box rules

Over 18-months in the making, the patent-box rules are expected to go beyond those currently existing worldwide. A number of companies have been rewarded in their efforts with Arthur Sinodinos confirming he will consider these measures. Both bodies would like to have something ready for May.

 

Reversing ESAS taxing rules

This issue gained momentum last year with a number of companies (predominantly biotech and IT) publicly announcing they were leaving our shores (largely) in part to our restrictive ESAS rules. Both Hockey and Sinodinos have acknowledged this issue is currently under review.

 

Targeting junior explorers

Last week, a discussion paper was released by the Assistant Treasurer to introduce an Exploration Development Incentive, providing incentives for greenfields minerals exploration activity, with a focus on the small exploration sector. Other sector-based tax incentives are currently in the pipeline, undergoing economic modelling and tailored policy design. Some of these will emerge in the public domain in the lead up to Budget night.

 

It will be an interesting time for Sinodinos in his first year as Assistant Treasurer as he balances compelling economic arguments with limited budget constraints. It will be equally interesting to observe which incentives are announced before (or on) Budget night and which ones may need to re-position their strategy in the context of the White Paper.

 

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Federal Budget 2014

Federal Budget 2014
KPMG's review of the major implications arising from the 2014 Federal Budget.

Corporate Tax

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