This Appendix provides an outline of the changes to the list of tax expenditures since the 2014 Tax Expenditures Statement. Since the 2014 TES, seven new tax expenditures have been added, 16 tax expenditures have been modified and 14 tax expenditures have been deleted.
C.1 New tax expenditures
Table C.1 reports new tax expenditure items arising from measures that have been announced since the 2014 TES up to the date of the 2015-16 Mid-Year Economic and Fiscal Outlook. The table also reports existing measures that were not previously reported as tax expenditures, but which have been recently identified as tax expenditures.
| TES code | Tax expenditure title | Reason for new tax expenditure |
|---|---|---|
| B43 | Accelerated depreciation of fencing and fodder storage assets for primary producers | New policy measure reported in the 2015-16 Budget |
| B46 | Concessional taxation for small business | New policy measure reported in the 2015-16 Budget |
| B49 | Immediate deduction for professional expenses | New policy measure reported in the 2015-16 Budget |
| B50 | Income tax exemption for prescribed entities | Reporting modification. This tax expenditure merges the following tax expenditures from the 2014 TES:
B3 Income tax exemption for Commonwealth, State and Territory public authorities, and State and Territory entities B22 Public hospitals and not-for-profit hospitals income tax exemption B31 Exemption for the International Cricket Council for the 2015 Cricket World Cup B33 Philanthropy — income tax exemption for recreation-type not-for-profit societies B47 Income tax exemption for employee and employer organisations B53 Industry-specific not-for-profit societies and associations income tax exemption B55 Philanthropy — income tax exemption for charitable funds B56 Philanthropy — income tax exemption for registered charities, public educational, scientific and community service entities |
| B57 | Tax incentive for Standard Business Reporting software | New policy measure reported in the 2015-16 Mid-Year Economic and Fiscal Outlook |
| B58 | Tax incentives for angel investors | New policy measure reported in the 2015-16 Mid-Year Economic and Fiscal Outlook |
| E15 | Capital gains tax exemption for small business restructuring | New policy measure reported in the 2015-16 Budget |
C.2 Modified tax expenditures
Table C.2 reports tax expenditures that have been modified since they were last reported in the 2014 TES.
Modified tax expenditures refer to tax expenditures that have changed materially, for example because of a change to the benchmark, a measure that has been announced since the 2014 TES, a decision to remove a tax expenditure in a certain year, an amalgamation or split of tax expenditures, or the inclusion of a new element to an existing tax expenditure.
| TES code | Tax expenditure title | Modification to the tax expenditure |
|---|---|---|
| A2 | Exemption of certain income earned by Australians working overseas | From 1 July 2016, government employees delivering Official Development Assistance overseas will be ineligible for this exemption. |
| A5 | Exemption from income tax and the Medicare levy for residents of Norfolk Island | Income earned by residents of Norfolk Island will be subject to income tax and the Medicare levy from 1 July 2016. |
| A19 | Medicare levy exemption for residents with taxable income below the low-income thresholds | The Medicare levy low-income thresholds for singles, families and single seniors and pensioners has been increased from the 2014-15 income year. |
| A24 | Exemption of Child Care Assistance payments | Reporting Modification. This tax expenditure modifies ‘Exemption of the Child Care Rebate’ (A26 in 2014 TES) and incorporates ‘Exemption of Child Care Benefit’ (A37 in the 2014 TES). From 2017-18 this tax expenditure incorporates the Child Care Subsidy, subject to passage of legislation. |
| A38 | Zone tax offsets | From 1 July 2015, ‘fly-in fly-out’ and ‘drive-in drive-out’ (FIFO) workers are excluded from the Zone Tax Offset where their normal residence is not within a ‘zone’. |
| A43 | Tax concessions for employee share schemes income | On 1 July 2015, additional tax concessions for employee share schemes took effect. The taxing point for rights now generally occurs when the rights are exercised (converted to shares). There is also a tax deferral (for rights) or exemption (for shares) on the discount component of employee share schemes provided at a small discount to employees of eligible start-up companies. |
| A51 | Car expenses — alternatives to the logbook method | The ‘one third of actual expenses’ method and ‘12 per cent of original value’ method will no longer be available from 1 July 2015, subject to the passage of legislation. |
| B35 | Farm Management Deposit scheme | Restrictions on FMDs accounts being used as an offset for business loans or from being re-accessed by primary producers will be removed and the maximum limit on deposits will increase to $800,000 from 1 July 2016. |
| B55 | Tax exemption for Early Stage Venture Capital Limited Partnerships | Investments in new ESVCLPs will be eligible for a tax offset of 10 per cent of the value of new capital invested. The maximum fund size for new ESVCLPs will be increased from $100 million to $200 million. New and existing ESVCLPs will also be allowed to invest in a wider range of investment activities. |
| TES code | Tax expenditure title | Modification to the tax expenditure |
|---|---|---|
| B62 | Accelerated write-off for expenditure on water facilities for primary producers | Primary producers will be able to immediately deduct capital expenditure on water facilities. |
| B79 | Small business — simplified depreciation rules | The asset value threshold for the immediate write-off has been increased to $20,000 from 7.30pm (AEST) on 12 May 2015 until 30 June 2017. |
| D15 | Exemption from the fringe benefit cap for meal entertainment and entertainment facility leasing expenses | A $5,000 cap on previously uncapped fringe benefits tax exemption on ente rtainment benefits is being introduced from 1 April 2016. |
| D47 | Work-related items — exemption | The exemption is no longer to be limited to one item of each type per employee per year for small business employers. |
| E31 | Tax exemption for certain investments in venture capital | VCLPs will be allowed to invest in a wider range of investment activities. |
| F8 | Excise concessions for ‘alternative fuels’ | The excise rate for biodiesel will be increased (in addition to indexation) over 15 years until it reaches a discounted rate at half the rate of diesel. |
| H11 | Digital products and services | From 1 July 2017, imported services will be subject to GST. |
C.3 Deleted tax expenditures
Table C.3 reports tax expenditures that have been deleted since the 2014 TES. Tax expenditures were deleted where legislation to abolish them commenced before the 2015-16 MYEFO unless, for example, a tax expenditure continued to generate significant revenue forgone estimates in future years.
| 2014 TES code | Tax expenditure title | Reason for deletion |
|---|---|---|
| A23 | Exemption for Defence Abuse Reparation Payment Scheme | The Defence Abuse Reparation Payment Scheme expires on 30 June 2016. |
| A32 | Mature Age Worker Tax Offset | The Mature Age Worker Tax Offset was abolished by legislation from 1 July 2014. |
| A37 | Exemption of Child Care Benefit | Reporting Modification. This tax expenditure is now incorporated into A24 Exemption of Child Care Assistance payments. |
| A40 | Exemption of Government contributions to First Home Saver Accounts | Eligibility for Government contributions to First Home Saver Accounts ceased on 30 June 2015. |
| A42 | Tax treatment of First Home Saver Accounts earnings | First Home Saver Accounts were abolished from 1 July 2015. |
| B3 | Income tax exemption for Commonwealth, State and Territory public authorities, and State and Territory entities | Reporting modification. This tax expenditure is now incorporated into B50 Income tax exemption for prescribed entities. |
| B22 | Public hospitals and not-for-profit hospitals income tax exemption | Reporting modification. This tax expenditure is now incorporated into B50 Income tax exemption for prescribed entities. |
| 2014 TES code | Tax expenditure title | Reason for deletion |
|---|---|---|
| B31 | Exemption for the International Cricket Council for the 2015 Cricket World Cup | Reporting modification. This tax expenditure is now incorporated into B50 Income tax exemption for prescribed entities. |
| B33 | Philanthropy — income tax exemption for recreation-type not-for-profit societies | Reporting modification. This tax expenditure is now incorporated into B50 Income tax exemption for prescribed entities. |
| B47 | Income tax exemption for employee and employer organisations | Reporting modification. This tax expenditure is now incorporated into B50 Income tax exemption for prescribed entities. |
| B53 | Industry-specific not-for-profit societies and associations income tax exemption | Reporting modification. This tax expenditure is now incorporated into B50 Income tax exemption for prescribed entities. |
| B55 | Philanthropy — income tax exemption for charitable funds | Reporting modification. This tax expenditure is now incorporated into B50 Income tax exemption for prescribed entities. |
| B56 | Philanthropy — income tax exemption for registered charities, public educational, scientific and community service entities | Reporting modification. This tax expenditure is now incorporated into B50 Income tax exemption for prescribed entities. |
| F3 | Incentives for licensees to facilitate new arrangements in the 400 MHz band | Ceased to have effect at 31 December 2015 |