Australian Federal Budget 2024/25

The Commonwealth Government's 2024/25 Federal Budget outlined a modest agenda on international and related tax reforms, according to global law firm DLA Piper.

"Among the more significant reforms is a new penalty for Significant Global Entities, with annual global group turnover of greater than AUD 1 billion, that are considered to have mis-characterised or undervalued royalty payments," said Jock McCormack, Head of Tax, DLA Piper.

"In relation to global tax reform, the budget includes the discontinuation of the proposed initiative to deny tax deductions for payments relating to intangibles held in low tax jurisdictions, noting that this proposed integrity measure will be addressed in the Pillar II reforms," Jock added.

Jock said the budget included initiatives to accelerate the energy transition, such as the introduction of a green hydrogen production tax incentive and comparable tax incentive for certain critical minerals production.

The Budget also includes measures to the strengthen the foreign resident capital gains tax (CGT) regime.

"This aims to ensure taxation applies foreign residents on direct and indirect sales of assets with a close economic connection to Australian land and, to secondly, introduce an advance ATO notification process to improve oversight and compliance with the foreign resident CGT withholding tax rules," Jock added.

Jock said the extension of the "instant asset write off" concessions until 30 June 2025, would be well received among business operators.