Tax Update

Abstract

Probably the most significant changes to Australia’s tax rules were those proposed by the government in this year’s budget as part of its response to the Global Financial crisis. Among the announced changes, superannuation contribution concessions have been halved, there are to be new private health insurance tiers, the s 26AG exemption for resident taxpayers will be limited to aid workers and some government employees, the thin capitalisation rules are to change, the government proposes to improve the tax treatment of off-market share buy-backs, the foreign source income attribution regime is to be reformed, and the R&D concession is to be replaced by a new R&D credit. The Courts and the ATO have also been active and there have been a number of new cases and new and revised rulings – all of which have impacted on the law in varying degrees. This paper will look at some of those changes – either because of the way in which they have changed (or reinforced) our understanding of the law or, in some cases, just because of their quirkiness.