Budget 2017 – Things employers of expats need to know | KPMG | AU

Three things employers of expatriates need to know about #Budget2017

Budget 2017 – Things employers of expats need to know

Daniel Hodgson, Hayley Lock, and Caroline Hickson emphasis Budget matters for employers of expatriates.

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Federal Budget 2017: Global Mobility

#Budget2017 might have been a fizzer for some, but if you are a global mobility program manager here are three things you need to know:

1. The bad news

Levy on visa sponsors for Skilling Australians Fund

From March 2018, large businesses will have:

  • an upfront payment of $1,800 per year per employee on a Temporary Skill Shortage visa (the replacement for the subclass 457)
  • a one-off levy of $5,000 for each employee sponsored for permanent residence.

2. The good news... well, for a while...

Tax rate changes

The Temporary budget repair levy (TBRL) ends on 30 June 2017. Changes to balance sheets are required from 1 July 2017. Fringe Benefits Tax (FBT) rates have already been adjusted back to 47 percent.

Hot tip: the removal of the TBRL will likely offset the increased costs for visas for inbounds.

The Medicare levy will increase from 2 percent to 2.5 percent from 1 July 2019. Changes to balance sheets are required from this date. FBT rates will be adjusted to 47.5 percent from 1 April 2020.

3. The sleeper you might have missed

Changes to taxation of Australian housing

Non-residents and inbound temporary tax residents will be denied access to the capital gains tax (CGT) main residence exemption from 9 May 2017. Existing properties will be grandfathered until 30 June 2019. This exemption has been one of the key considerations influencing the decision to rent out a home while on assignment.

There has also been a reduction of the threshold for withholding tax (12.5 percent) on real property sales by non-residents from $2m to $750k. This will bring more Australian outbound assignees in scope of these provisions.

It’s important to get in front of these changes – communicate quickly and clearly with your key stakeholders and let us know if you need a hand preparing or reviewing comms.

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