21 October 2011
Back in May 2010, the Government announced that they would remove the need for simple tax returns by providing a standard deduction or work related expenses and the cost of managing tax affairs.
The reforms went to public consultation in March 2011 and now the Government has released the exposure draft. The proposed reforms provide a standard deduction of $500 for 2012/2013, rising to $1,000 for 2013/2014 and subsequent years.The standard deduction does not apply:
- If the individual taxpayer would have a greater taxable income for the current year.
- Where the individual would have a larger taxable income than they would if it did not apply; or where the individual would have a smaller tax loss if the standard deduction was applied; or where the year in which the standard deduction could apply would not be a loss year when it would be if the standard deduction were applied.
- The standard deduction cannot contribute to a tax loss.
The amendment commences on the latter of 1 July 2012 and the commencement of the mining resource rent tax legislation. If the mining resource rent tax legislation does not commence the amendment does not commence at all.
The amendment applies to income tax assessments for the 2012/2013 and later income years.
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