The Minerals Resource Rent Tax Repeal and Other Measures Bill 2013

On 24 October 2013, the Government released a draft of the Minerals Resource Rent Tax (MRRT) Repeal and Other Measures Bill 2013. The Bill was introduced into parliament on 13 November 2013.

The Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 removes the Minerals Resource Rent Tax with effect from 1 July 2014. The Bill includes the:

repeal of loss carry back;

reduction in the small business instant asset write off threshold;

repeal of accelerated depreciation for motor vehicles;

repeal of the geothermal exploration provisions;

re-phasing of the change in rate of the superannuation guarantee charge percentage;

repeal of the low income superannuation contribution;

repeal of the income support bonus; and

repeal of the schoolkids bonus.

1) Rephasing of the SG charge percentage increase:

Before: The SG charge percentage was supposed to increase from 9.25 per cent to 9.5 per cent for the year starting on 1 July 2014, and gradually increase by half a percentage point each year until it reaches 12 per cent for years starting on or after 1 July.
After: The SG charge percentage will pause at 9.25 per cent for the years starting on 1 July 2014 and 1 July 2015, and increase to 9.5 per cent for the year starting on 1 July 2016, and then gradually increase by half a percentage point each year until it reaches 12 per cent for years starting on or after 1 July 2021.

2) Repeal of loss carry back:

Before: Companies can either carry their tax losses forward to use as a deduction for a future income year or carry up to $1 million back to an earlier year (in which they paid tax) to obtain a tax offset for the current year.
After: Companies can only carry their tax losses forward to use as a deduction for a future year.

3) Changes to the capital allowances for small business entities:

Before: As from July 1, 2013 Small businesses could claim up to $5,000 as an immediate deduction for motor vehicles costing $6,500 or more that were acquired from the 2012-13 income year onwards.
The remaining value was depreciated in the general small business pool at a rate of 15% in the first year and then at 30% a year thereafter.

If the vehicle cost less than $6,500, the whole amount can be claimed as an immediate deduction under the instant asset write-off provisions.

After: Small business entities can claim a deduction for the value of a depreciating asset that costs less than $1,000 in the income year the asset is first used or installed ready for use. Small business entities can claim a deduction for an amount included in the second element of the cost of a depreciating asset that was first used or installed ready for use in a previous income year. The amount must be less than $1,000.

Small business entities can allocate depreciating assets that cost $1,000 or more to their general small business pool and claim a deduction for the depreciation of the assets in the pool. Assets allocated to the general small business pool depreciate at a rate of 15 per cent in the year they are allocated, and a rate of 30 per cent in subsequent income years.

If the value of a small business entity’s general small business pool is less than $1,000 at the end of the income year, the small business entity can claim a deduction for the entire value of the pool.
Motor vehicles are subject to the same rules as other depreciating assets.
http://www.comlaw.gov.au/Details/C2013B00189/Explanatory%20Memorandum/Text