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On 17 July 2014, Tax and Superannuation Laws Amendment (2014 Measures No 4) Bill 2014 was introduced into the House of Representatives.

The following is extracted from the Explanatory Memorandum.

SCHEDULE 1 to the Bill makes amendments to the thin capitalisation rules and, in particular:

  • tightens the debt limit settings in the thin capitalisation rules to ensure that multinationals do not allocate a disproportionate amount of debt to their Australian operations;
  • increases the de minimis threshold to minimise compliance costs for small businesses; and
  • introduces a new worldwide gearing debt test for inbound investors.

Schedule 1 to the Bill applies to income years commencing on or after 1 July 2014.

SCHEDULE 2 to the Bill reforms the exemption for foreign non-portfolio dividends. It applies to distributions and non-share dividends made after the day the Bill receives Royal Assent.

SCHEDULE 3 amends the ITAA 1997 to ensure that the foreign residents capital gains tax (CGT) regime operates as intended by preventing the double counting of certain assets under the Principal Asset Test. A technical correction is also made to the meaning of ‘permanent establishment’ in s 855-15 of the ITAA 1997.

The amendments to the Principal Asset Test will apply to CGT events that occur to different entities on:

  • 7.30pm on 14 May 2013; and
  • 13 May 2014.

The technical correction to s 855-15 will apply from the commencement of Division 855 (12 December 2006).

SCHEDULE 4 to the Bill amends the tax law to provide greater transparency to taxpayers about how their tax money is spent, by requiring the Commissioner of Taxation to issue a tax receipt to individuals for the income tax assessed to them.

SCHEDULE 5 to the Bill makes a number of miscellaneous amendments to the taxation and superannuation laws. These amendments are part of the Government’s commitment to the care and maintenance of the taxation and superannuation systems. These amendments include style changes, the repeal of redundant provisions, and the correction of anomalous outcomes and corrections to previous amending Acts. The amendments have various application dates.

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