Australian federal budget released with a wave of reforms

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Australian federal budget released with a wave of reforms

Sponsored by

Sponsored_Firms_piper.png
money-6010252.jpg

Jock McCormack of DLA Piper Australia analyses the latest Australian federal budget, with a host of important international tax reforms to be considered.

The Australian government delivered its 2023/24 Federal Budget on Tuesday 9 May 2023, demonstrating and reaffirming its strong commitment to critically important international and related tax reforms.

The key initiatives from the Budget include:

  • Implementing the OECD/G20-led Pillar II solution, incorporating the 15% global minimum tax for large multinational enterprises for income years commencing on or after January 1 2024;

  • Expanding Australia’s general anti-avoidance rules (Part IVA) to apply, firstly, to arrangements designed to access lower withholding tax rates on income paid to foreign residents (for example, under double tax treaties) and, secondly, potentially where there is a dominant purpose to reduce foreign income tax;

  • Reducing the managed investment trust withholding tax rate from 30% to 15% for eligible new build-to-rent projects;

  • Extending the clean building managed investment trust withholding tax concession (10%) to eligible data centres and warehouses;

  • Limiting the proportion of petroleum resource rent tax (PRRT) ‘assessable income’ that can be offset by deductions to 90% (of the assessable receipts), effectively introducing a ‘cap’ on deductions. Separately, the government will ‘modernise’ the PRRT from July 1 2024, following the Treasury review of the PRRT, including gas transfer pricing;

  • Tightening (or clarifying) the concept of ‘exploration for petroleum’ in the practical application of PRRT; and

  • Deferring the start date for the tax integrity measure previously announced for franked distributions funded by capital raisings from December 19 2016 to September 15 2022.

The government also continues to progress other international tax developments dealing with thin capitalisation, restricting deductibility of payments for intangibles in low tax jurisdictions and international tax transparency/disclosure. It is expected that these international tax developments will progress through parliament in the coming weeks.

more across site & shared bottom lb ros

More from across our site

The firm’s lack of transparency regarding its tax leaks scandal should see the ban extended beyond June 30, senators Deborah O’Neill and Barbara Pocock tell ITR
Despite posing significant administrative hurdles, digital services taxes remain ‘the best way forward’ for emerging economies, says Neil Kelley, COO of Ascoria
A ‘joint understanding’ among G7 countries that ‘defends American interests’ is set to be announced, Scott Bessent claimed
The ‘big four’ firm’s inaugural annual report unveiled a sharp drop in profits for 2024; in other news, Baker McKenzie and Perkins Coie expanded their US tax benches
Representatives from the two countries focused on TP as they met this week to evaluate progress under a previously signed agreement – it is understood
The UK accountancy firm’s transfer pricing lead tells ITR about his expat lifestyle, taking risks, and what makes tax cool
Dolphin Drilling intends to discuss the final liability amount and manner of settlement with HM Revenue and Customs
Winning the case against the 20% VAT imposition was always going to be an uphill challenge for the claimants, UK tax advisers argue
A ‘paradigm shift’ in Chile’s tax enforcement requires compliance architecture built on proactive governance, strategic documentation and active monitoring of judicial developments
Paul Monaghan, CEO of the Fair Tax Foundation, digs into where companies are going wrong with CbCR, the ‘Russia question’, and shares new data exclusively with ITR
Gift this article