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Mandatory Data Breach Notification Scheme
The new Mandatory Data Breach Notification laws come into effect from 22 February 2018. Under the new law mandatory data breach assessment and notification obligations will apply to all businesses bound by the Privacy Act 1988 (Cth).

The scheme will impose the following obligations on businesses:

  • to carry out a prompt and thorough assessment within a maximum period of 30 days if they suspect there has been an 'eligible data breach'; and
  • make prescribed notifications to the Office of the Australian Information Commissioner and to affected individuals, as soon as it has reasonable grounds to believe there has been an 'eligible data breach'.

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Australian state level tax legislation targeting foreign persons

As addressed in our recent article, Australian governments, both at the Federal and state level have for several years been targeting foreign individuals and other foreign investors in a range of ways. Most recently, 2017 has seen legislation at both the Federal and state levels which will introduce new provisions apply to foreign and non-resident persons or will extend laws already in place. In May 2017, the Treasurer announced several measures targeted specifically at foreign residents in the 2017-18 Australian Federal Budget.

Some of these provisions are in federal legislation and so apply to all Australia. Others were introduced by state governments. These will apply only to a particular state and may apply differently to similar provisions in other states. Having addressed the measures applying at the Federal level in a previous articles, this article addresses recent changes at the State level.

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Legislative changes passed by the government in May 2017 reduced the corporate tax rate to 27.5% from 1 July 2016 for companies with aggregated turnover of less than $10 million (the threshold is set to increase to $25 million in the 2018 financial year and $50 million in the 2019 financial year).

However, following the decision in the Bywater case a recent draft ATO Interpretative Decision has been releaed that included the following comment by the Commissioner:

 “This ruling is not concerned with what amounts to carrying on business. However, generally, where a company is established or maintained to make profit or gain for its shareholders it is likely to carry on business. This is so even if the company only holds passive investments, and its activities consist of receiving rents or returns on its investments and distributing them to shareholders.”

Much discussion followed as to whether companies holding passive investments would be eligible for the lower 27.5% tax rate provided their aggregated turnover was less than the relevant threshold. However, the government was quick to state that this was not an intended outcome of the policy and, albeit some months later, the Parliament has now moved to determine through legislation the circumstances where passive income earning companies will be entitled to the lower tax rate. 

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With all the recent changes in tax, it can be hard to keep up! That being the case, CCH has helpfully compiled a checklist of the top tax changes for this financial year. Note that, in some cases, implementation of these changes may be dependent on the future passage of the necessary legislation.

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Chartered Accountants Australia and New Zealand has reported the following today:

After much uncertainty surrounding which companies can access the lower corporate tax rate, the government has released exposure draft legislation to clarify that passive investment companies cannot access the lower company tax rate for small business. The government has effectively introduced an 80:20 test.

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Recent Australian tax changes targeting foreign persons

Australian governments, both at the Federal and state level continue to target foreign individuals and other foreign investors in a range of ways. This has been the case for several years and has included such measures as introducing a higher basic tax rate for non-resident individuals as well as removing the 50% discount that would otherwise apply to capital gains crystallised on assets owned for more than 12 months.

Most recently, 2017 has seen legislation at both the Federal and state levels which will introduce new provisions apply to foreign and non-resident persons or will extend laws already in place. In May 2017, the Treasurer announced several measures targeted specifically at foreign residents in the 2017-18 Australian Federal Budget.

The recent Federal budget changes will have the following impacts:

  • The loss of the main residence exemption for non-residents selling their homes
  • Limiting the benefits for non-resident investors of the newly introduced tax incentive for investments in afforable housing
  • Restricting foreign ownership in new housing developments; and
  • Introducing an annual charge on foreign owners of underutilised residential property

Following the Federal Budget, the list of key issues tht apply to property transaction for non-residents has grown to include:

  • The loss of the main residence exemption;
  • Capital gains tax (CGT) withholding tax;
  • A $5000 Vacancy Tax;
  • The loss of the 50% CGT discount;
  • Stamp duty surchage with implications for trusts;
  • Land tax surchage with implications for trusts; and
  • The implications of the stamp duty surcharge and the land tax surchage for trusts.

Some of these provisions are in federal legislation and so apply to all Australia. Others were introduced by state or territory governments. These will apply only to a particular state or territory and may apply differently to similar provisions in other states.

This article addresses the measures applying at the Federal level, and we will address recent changes at the State level in a separate article.

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The Treasury Law Amendment (Enterprise Tax Plan) Bill 2016 was passed on 19 May 2017 and will be effective from 1 July 2016. The bill brings into play multiple benefits for small businesses including a progressive increase in the unincorporated small business tax discount, and an increase in the small business turnover threshold for the purposes of applying the discount.

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The government has recently introduced draft legislation (Treasury Laws Amendment (2017 Enterprise Incentives No. 1) Bill 2017) that proposes amendments to the existing law for determining whether a business can carry forward and use tax losses and bad debts it incurred prior to a change of control or ownership of that business.

The proposed legislation introduces a new test, the ‘similar business test’ to supplement the existing, and less flexible ‘same business test’. It is intended the similar business test will give companies (and certain trusts) greater scope to innovate and expand their business following a change of ownership without risking losing their tax losses.

The proposed new law will apply to businesses that have had, or are expecting to have, a change of ownership and will apply to losses or bad debts incurred from 1 July 2015.

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