The Government made a commitment to reforms for the shipping industry during the Federal election campaign in August 2010.
In joint media release No 2012/009, issued 20 February 2012, the Assistant Treasurer, Minister for Small Business and Minister for Sport, Senator Mark Arbib, and the Minister for Infrastructure and Transport, Anthony Albanese, announced the release for public consultation of exposure draft legislation and associated explanatory material to give effect to the tax component of those reforms.
These proposed amendments would provide a number of tax incentives designed to revitalise the Australian shipping industry in particular circumstances. These incentives include:
- an income tax exemption for ship operators;
- provision for accelerated depreciation of vessels via a cap of 10 years to the effective life of those vessels;
- roll-over relief from income tax on the sale of a vessel;
- an employer refundable tax offset; and
- an exemption from royalty withholding tax for payments made for the lease of shipping vessels.
Subject to the passage of legislation, these changes are expected to come into effect on 1 July 2012.
The closing date for submissions is Monday 5 March 2012.