Federal Budget 2016 – Banking | KPMG | AU

Federal Budget 2016 – Banking

Budget 2016 – Banking

For the financial services sector the Budget is a mixed bag of additional integrity measures tempered with some welcome developments.

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Despite pre-budget speculation, there were no changes to the thin capitalisation rules announced.

In addition to the array of superannuation changes key announcements for financial services include:

  • reduction in corporate tax rate – a complex mechanism to reduce the corporate tax rate for all companies to 25 percent by the 2026-27 income year
  • Diverted Profits Tax – to be added to the existing MAAL measure with effect from 1 July 2017 to complete a package of anti-avoidance provisions applying to significant global entities
  • Tax Integrity Package – from 1 July 2017 administrative penalties for significant global entities who fail to meet disclosure obligations will be increased
  • Anti-hybrid rules – implementation of the OECD BEPS Action 2: Anti-hybrid Rules
  • TOFA simplification proposals and
  • consolidation changes further modified.

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