Tax changes impacting South Australian businesses
Listed below are the key tax changes which impact South Australian small to medium sized businesses.
Jobs Accelerator Grant Scheme
The Government has announced a Job Accelerator Grant Scheme to encourage South Australian businesses to employ additional employees, and employ them for a period of at least 12 months.
A Job Accelerator Grant of up to $10,000 ($5,000 each year for two years) per new Full-Time Equivalent (FTE) job created is available for businesses liable for payroll tax in South Australia with total Australian wages of $5 million or less.
A Job Accelerator Grant for Small Business & Start-ups of up to $4,000 ($2,000 each year for two years) per new job created is available for most businesses that are not liable for payroll tax. This includes businesses with Australian wages below the payroll tax free threshold (currently $600,000) and most organisations that are exempt from payroll tax (e.g. public benevolent institution).
Businesses that increase their number of South Australian employees will be eligible to receive a grant for each additional worker employed by them in a new position between 1 July 2016 and 30 June 2018. The grant will be paid at the first and second anniversary date of employment.
Businesses must register a new employee within 90 days of the employee’s commencement date.
The extension of the small business payroll tax rebate
It was announced that the small business payroll tax rebate will be extended for the next four years. The small business payroll tax rebate operates to provide eligible employers with a taxable Australian payroll of less than or equal to $1.2 million with a rebate of up to 50% of their payroll tax liability.
Changes to the Stamp Duties Act 1923 the SDA
There were various amendments to the SDA which have been outlined below.
Extension of the stamp duty concession for purchases of “off-the-plan” apartments
The stamp duty concession for purchases of “off-the-plan” apartments has been extended until 30 June 2017. The concession will now apply to all “off-the-plan” apartment developments in South Australia. Previously, only apartments in the CBD and inner-city suburbs were eligible for this concession.
Removal of the prescribed goods provisions in the Stamp Duties Act 1923 (the “SDA”)
From 1 July 2016, stamp duty will be removed from all goods, whether those goods are part of an arrangement that includes a dutiable land transaction or a landholder transaction.
Amendment to Section 67 of the SDA
This amendment will clarify the scenario where a purchaser acquires property from two or more independent arm’s length vendors. The amendment will state that the value of these properties will not be aggregated to determine the total stamp duty liability and will take effect from the date of assent.
Amendment to Section 71(5)(j) of the SDA – land purchased by charitable and religious associations
This amendment will ensure that all trustees that hold eligible land as trustee of an eligible land trust qualify for the stamp duty exemption. The amendment will clarify that the exemption is available to purchases and gifts of property, that are to be used wholly for charitable and religious purposes.
Changes to the Land Tax Act 1936
There have been numerous amendments to the Land Tax Act 1936 which have been outlined below.
The expansion of the land tax exemption for land held by sporting and racing associations
Currently where land owned by sporting or racing associations that is used for non-sporting or non-racing activities is not exempt from land tax.
The Government has announced that it will expand the scope of the land tax exemptions available to include all non-residential and non-vacant land from 1 July 2016. Please note, land held by a sporting or racing association that constitutes residential or vacant land will continue to be subject to land tax.
An amendment to Section 4(1)(j) of the Land Tax Act 1936
Land owned by an association established for a charitable, educational, benevolent, religious or philanthropic purpose is generally exempt from land tax.
The current provisions require that the owner of the land be established for charitable purposes, including where the land is held by a trustee on behalf of a charitable purposes trust, the trustee must also be established for charitable purposes. In some cases this can result in a trustee that owns land on behalf of a charitable purposes trust not satisfying the criteria in Section 4(1)(j) of the Land Tax Act 1936.
The Government has announced that it will amend Section 4(1)(j) of the Land Tax Act 1936 to ensure that all trustees that hold eligible land as trustee of an eligible trust qualify for this land tax exemption.
The expansion of the land tax principal place of residence exemption
Currently, where a person moves out of their principal place of residence (PPR) to substantially renovate or rebuild their home, the site (land) may become liable for land tax.
The Government has announced that, from the 2016-17 financial year, it will expand the PPR exemption criteria to provide individuals with the ability to maintain a PPR on the site being redeveloped for up to two financial years.
The exemption may also extend to situations where a taxpayer purchases a property, whether vacant land or other unoccupied property, with the intention to renovate or construct what will become their PPR.
Other announcements measures
An amendment to Section 93(1) of the Taxation Administration Act 1996
A taxpayer cannot exercise a right of appeal unless they have paid the Commissioner 50% of the whole amount of any tax to which the appeal relates. An amendment has been made to make clear that a taxpayer is only required to pay 50% of the primary tax in dispute before an appeal can be lodged (as opposed to 50% of the whole amount of tax assessed inclusive of interest and penalty tax).
The introduction of a tax for betting companies offering services in South Australia
A tax of 15% on the “Net Wagering Revenue” of betting companies offering services in South Australia, will be introduced effective from 1 July 2017.