Increased deduction for small business external training expenditure
Small and medium businesses (aggregated annual turnover of less than $50 million) will be able to deduct an additional 20% of expenditure incurred on external training courses provided to employees.

The external training courses will need to be provided to employees in Australia or online and be delivered by entities registered in Australia.

Exclusions include in-house or on the job training, and expenditure on external training courses for persons other than employees.

The measure will apply for expenditure incurred from 7:30pm (AEDT) on 29 March 2022 (Budget night) until 30 June 2024. The boost for eligible expenditure incurred before 30 June 2022 will be claimed in tax returns for the following income year. The boost for eligible expenditure incurred between 1 July 2022 and 30 June 2024, will be included in the income year in which the expenditure is incurred.

Increased deduction for digital technology adoption by small businesses
Small and medium businesses (aggregated annual turnover of less than $50 million) will be able to deduct an additional 20% of the cost incurred on business expenses and depreciating assets that support their digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud based services.

An annual cap will apply in each qualifying income year so that expenditure of up to $100,000 will be eligible for the boost.

The measure will apply to eligible expenditure incurred from 7:30pm (AEDT) on 29 March 2022 (Budget night) until 30 June 2023. The boost for eligible expenditure incurred before 30 June 2022 will be claimed in tax returns for the following income year. The boost for eligible expenditure incurred between 1 July 2022 and 30 June 2023, will be included in the income year in which the expenditure is incurred.

Apprenticeship wage subsidy extended
The Boosting Apprenticeship Commencements and Completing Apprenticeship Commencements wage subsidy will be extended by 3 months to 30 June 2022. Under the original measure, eligible businesses were reimbursed up to 50% of an apprentice or trainee’s wages of up to $7,000 per quarter for 12 months.

Changes to PAYG income tax instalment system
The Government proposes to set the GDP uplift factor for Pay As You Go (PAYG) instalments at 2% for the 2022-23 income year. This uplift factor is lower than the 10% that would have applied under the statutory formula.

The Government announced it will enable companies to choose to have their PAYG instalments calculated based on current financial performance, extracted from business accounting software, with some tax adjustments.

It is expected that systems will be in place by 31 December 2023, with the measure to commence on 1 January 2024, for application to periods starting on or after that date.

Taxable Payments Reporting System data
The Government announced it will allow businesses the option to report Taxable Payments Reporting System data (via accounting software) on the same lodgement cycle as their activity statements.

It is anticipated that systems will be in place by 31 December 2023, with the measure to commence on 1 January 2024, for application to periods starting on or after that date. 

Expanded access to employee share schemes
The Government announced it will expand access to employee share schemes.

Where employers make larger offers in connection with employee share schemes in unlisted companies, participants can invest up to:

  • $30,000 per participant per year, accruable for unexercised options for up to 5 years, plus 70 per cent of dividends and cash bonuses; or
  • any amount, if it would allow them to immediately take advantage of a planned sale or listing of the company to sell their purchased interests at a profit.

The Government will also remove regulatory requirements for offers to independent contractors, where they do not have to pay for interests.

Expansion of “patent box” tax concessions

Agricultural sector
The Government announced it will provide concessional tax treatment for corporate taxpayers who commercialise their eligible patents linked to agricultural and veterinary chemical products listed on the Australian Pesticides and Veterinary Medicines Authority (APVMA), PubCRIS (Public Chemicals Registration Information System) register, or eligible Plant Breeder’s Rights (PBRs).

Eligible income will be subject to an effective income tax rate of 17 per cent for PBRs and patents granted or issued after 29 March 2022 and for income years starting on or after 1 July 2023. Eligible income will be taxed at the concessional tax rate to the extent that the research and development of the innovation took place in Australia.

Low emissions innovation
The expanded patent box will provide concessional tax treatment for corporate taxpayers who commercialise their patented technologies which have the potential to lower emissions. Eligible income will be subject to an effective income tax rate of 17 per cent, for patents granted after 29 March 2022 and for income years starting on or after 1 July 2023. Eligible income will be taxed at the concessional tax rate to the extent that the research and development of the innovation took place in Australia.

Medical and biotechnology innovations
The Government announced it will expand previous measures to now allow patents granted or issued after 11 May 2021 to be eligible for the regime. The Government will also now allow standard patents granted by IP Australia, utility patents issued by the United States Patent and Trademark Office (USPTO), and European patents granted under the European Patent Convention (EPC) to be eligible. However, taxpayers will still only benefit from the concessional tax treatment under the patent box to the extent that the R&D occurred in Australia.

Excise administration to be streamlined
The government announced it will streamline the administration of fuel and alcohol excise, and excise-equivalent customs duty. Some of the changes expected to apply from 1 July 2023 are detailed below.

Allowing fuel and alcohol businesses with an annual turnover of less than $50 million to lodge and pay excise and excise equivalent customs duty on a quarterly basis, rather than weekly or monthly as at present. These businesses will lodge returns and pay excise by the 28th day of the month after the end of each quarter.

Further, businesses that import fuel and alcohol products for further manufacture or distribution, and want to defer payment of excise or excise-equivalent customs duty, will be able to transfer the fuel or alcohol straight into a warehouse administered by the Australian Taxation Office (ATO) once the products have gone through Australian Border Force (ABF) customs clearance. The ABF will still collect tax on direct imports.