The Australian government has announced a 17.6 billion economic stimulus package aimed at stimulating the economy off the back of the World Health Organisation declaring the coronavirus a pandemic.
The key tax and stimulus measures include:
From Thursday 12 March 2020, the instant asset write-off threshold has been increased from $30,000 to $150,000 (now for business with a turnover of up to 500 million, up from $50 million) until 30 June 2020.
A time-limited 15-month investment incentive (through to 30 June 2021) which will operate to accelerate certain depreciation deductions. This measure will also be available to businesses with a turnover of less than $500 million, which will be able to immediately deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost. As announced, this measure is proposed to only apply to new depreciating assets first used, or installed ready for use, by 30 June 2021.
Tax-free payments of up to $25,000 for eligible small and medium businesses (i.e., with a turnover of less than $50 million that employ staff) based on their PAYG withholding obligations. This is not a cash payment, but it is a credit equal to 50% of the PAYG amounts withheld from salary and wages paid to employees.
Businesses that lodge activity statements on a quarterly basis will be eligible to receive the credit for the quarters ending March 2020 and June 2020. A business that lodges on a monthly basis will be eligible for the credit for the March 2020, April 2020, May 2020 and June 2020 lodgements.
Employers with less than 20 full-time employees may be entitled to apply for Government-funded wage subsidies amounting to 50% of an apprentice’s or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020. The maximum subsidy for each apprentice/trainee is $21,000.
One-off $750 stimulus payment to pensioners, social security, veteran and other income support recipients and eligible concession cardholders. The payment will be tax-free and will not count as income for Social Security. These payments will commence being automatically made from 31 March 2020.
For more information please contact Melbourne Tax Advisory on 1300 942 230.
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