Published on the 13/05/2015 | Written by Beverley Head
After being almost entirely ignored in last year’s Budget, the tech sector this year has a starring role…
Ahead of last night’s Budget, Treasurer Joe Hockey announced new legislation to address tax avoidance by large companies. Apple, Google and Microsoft are among the global tech giants which have had their tax practices audited by the Australian Taxation Office recently, and are among the targets for the new Multinational Anti Avoidance law.
This will not replicate the UK’s approach to claw back unpaid taxes, but will instead provide the Commissioner of Taxes with new powers allowing the recovery of unpaid taxes and also the levying of fines of up to 100 percent of the unpaid amounts.
According to Hockey: “Under this new law when we catch companies cheating they will have to pay back double what they owe plus interest.”
Also intended to level the playing field is a proposed goods and services tax on digital goods and services, with draft legislation published outlining how the Government hopes to capture $350 million additional taxes over the next four years.
Besides taking in more funds from the tech sector, the Government is planning to spend some money with it, and has, as part of its $450 million anti-terrorism spending boost, allotted $131 million for telcos and ISPs which are now obliged to construct computer storage platforms to store two years’ worth of customer metadata. It has also allocated $295 million for information systems to support the Australian secret Intelligence Service.
The Budget confirmed funds for a $250 million five-year project to update the ICT at the Australian Bureau of Statistics which is lumbered with a raft of legacy systems, some of which are over 30 years old. The new system is intended to deliver faster more reliable insights.
Another winner from this year’s Budget is the start-up scene. From July 2016 new start-ups will be able to deduct accounting or legal costs associated with setting up the business, rather than write them off over five years.
The Government has also confirmed that it will reduce the obstacles to crowd-sourced equity funding, to complement the employee share ownership reforms currently before the parliament, all of which are intended to inject additional life into Australia’s start-up scene.
In his Budget address the Treasurer said: “To help small business grow we are facilitating new opportunities for crowd-sourced funding, making it easier for small investors to marry up with growing small businesses.”
Many of the Budget initiatives had been well flagged in advance. But there were a couple of surprises that have potential technology sector impacts.
For one, the Government is abolishing fringe benefits tax on all portable electronic devices used for work, such as mobile phones, laptops and tablets.
It has also revealed a small business stimulus with immediate effect, so organisations are entitled to claim immediate tax write offs for investment of up to $20,000 in equipment for their businesses, which is likely to prompt a rash of computer upgrades in the sector as small businesses seek to take advantage of the immediate write-offs instead of the usual five-year depreciation schedule.
