An Act to amend the law relating to taxation, and for related purposes
1 Short title
This Act is the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018.
2 Commencement
(1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
| Commencement information |
| Column 1 | Column 2 | Column 3 |
| Provisions | Commencement | Date/Details |
| 1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table | The day this Act receives the Royal Assent. | 21 June 2018 |
| 2. Schedule 1, Parts 1 and 2 | The first 1 January, 1 April, 1 July or 1 October to occur after the day this Act receives the Royal Assent. | 1 July 2018 |
| 4. Schedule 2, Parts 1 and 2 | The first 1 January, 1 April, 1 July or 1 October to occur after the day this Act receives the Royal Assent. | 1 July 2018 |
Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.
(2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.
3 Schedules
Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.
Note: The provisions of the Income Tax Assessment (1936 Act) Regulation 2015 amended or inserted by this Act, and any other provisions of that Regulation, may be amended or repealed by regulations made under section 266 of the Income Tax Assessment Act 1936 (see subsection 13(5) of the Legislation Act 2003).
Schedule 1—Low and Middle Income tax offset and Low Income tax offset
Part 1—Main amendments
Income Tax Assessment Act 1997
1 After Subdivision 61‑A
Insert:
Subdivision 61‑D—Low and Middle Income tax offset and Low Income tax offset
Guide to Subdivision 61‑D
61‑100 What this Subdivision is about
You may be entitled to a tax offset if you:
(a) are a lower‑income earner; or
(b) are the trustee of a trust who is liable to be assessed in respect of a share of the trust’s net income to which a beneficiary is presently entitled.
Table of sections
Operative provisions
61‑105 Entitlement to the Low and Middle Income tax offset
61‑107 Amount of the Low and Middle Income tax offset
61‑110 Entitlement to the Low Income tax offset
61‑115 Amount of the Low Income tax offset
Operative provisions
61‑105 Entitlement to the Low and Middle Income tax offset
(1) You are entitled to a *tax offset for the 2018‑19, 2019‑20, 2020‑21 or 2021‑22 income year if:
(a) you are an individual who is an Australian resident at any time during the income year; and
(b) your taxable income for the income year does not exceed $125,333.
(2) You are entitled to a *tax offset for the 2018‑19, 2019‑20, 2020‑21 or 2021‑22 income year if:
(a) for the income year, you are a trustee who is liable to be assessed under section 98 of the Income Tax Assessment Act 1936 in respect of a share of the *net income of a trust; and
(b) the beneficiary who is presently entitled to that share is an individual who is an Australian resident at any time during the income year; and
(c) that share does not exceed $125,333.
(3) If you are entitled to a *tax offset under subsection (2), you are entitled to a separate tax offset for each beneficiary who is presently entitled to a share for which subsection (2) is satisfied.
Note: This section will be repealed on 1 July 2024 by the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018.
61‑107 Amount of the Low and Middle Income tax offset
General rule
(1) The amount of your *tax offset is set out in the following table in respect of the following income (your relevant income):
(a) if you are an individual—your taxable income for the income year;
(b) if you are a trustee—the amount of the share of *net income referred to in subsection 61‑105(2).
| Amount of your tax offset |
| Item | If your relevant income: | The amount of your tax offset is: |
| 1 | does not exceed $37,000 | $200 |
| 2 | exceeds $37,000 but is not more than $48,000 | $200, plus an amount equal to 3% of the excess |
| 3 | exceeds $48,000 but is not more than $90,000 | $530 |
| 4 | exceeds $90,000 but is not more than $125,333 | $530, less an amount equal to 1.5% of the excess |
Note: This section will be repealed on 1 July 2024 by the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018.
If you are less than 18 years of age
(2) Despite subsection (1), the amount of your *tax offset for the income year cannot exceed a cap if:
(a) you are an individual who is a prescribed person in relation to the income year for the purposes of Division 6AA of Part III of the Income Tax Assessment Act 1936; and
(b) part (the excluded part) of your basic income tax liability for the income year is attributable to your eligible taxable income (within the meaning of section 102AD of that Act).
The cap is an amount equal to the remaining part of your basic income tax liability for the income year.
Note: Division 6AA (including section 102AD) is about income that particular kinds of children derive from particular sources.
(3) When working out the remaining part of your basic income tax liability, if you are also entitled to a *tax offset under section 160AAA of the Income Tax Assessment Act 1936, treat that tax offset as having been applied, to the extent possible, against the excluded part of your basic income tax liability.
Note: That tax offset is for individuals eligible for certain benefits.
If you are a trustee and the beneficiary is less than 18 years of age
(4) Despite subsection (1), the amount of your *tax offset for the income year cannot exceed a cap if:
(a) you are a trustee; and
(b) the beneficiary who is presently entitled to the share of *net income to which the tax offset relates is a prescribed person in relation to the income year for the purposes of Division 6AA of Part III of the Income Tax Assessment Act 1936; and
(c) part of your basic income tax liability for the income year is attributable to the portion of that share to which that Division applies.
The cap is an amount equal to the part of your basic income tax liability attributable to the remaining portion of that share.
Note 1: Division 6AA is about income that particular kinds of children derive from particular sources.
Note 2: To work out the portion of that share to which Division 6AA applies, see section 102AG of the Income Tax Assessment Act 1936.
61‑110 Entitlement to the Low Income tax offset
(1) You are entitled to a *tax offset for the 2022‑23 income year or a later income year if:
(a) you are an individual who is an Australian resident at any time during the income year; and
(b) your taxable income for the income year does not exceed $66,667.
(2) You are entitled to a *tax offset for the 2022‑23 income year or a later income year if:
(a) for the income year, you are a trustee who is liable to be assessed under section 98 of the Income Tax Assessment Act 1936 in respect of a share of the *net income of a trust; and
(b) the beneficiary who is presently entitled to that share is an individual who is an Australian resident at any time during the income year; and
(c) that share does not exceed $66,667.
(3) If you are entitled to a *tax offset under subsection (2), you are entitled to a separate tax offset for each beneficiary who is presently entitled to a share for which subsection (2) is satisfied.
61‑115 Amount of the Low Income tax offset
General rule
(1) The amount of your *tax offset is set out in the following table in respect of the following income (your relevant income):
(a) if you are an individual—your taxable income for the income year;
(b) if you are a trustee—the amount of the share of *net income referred to in subsection 61‑110(2).
| Amount of your tax offset |
| Item | If your relevant income: | The amount of your tax offset is: |
| 1 | does not exceed $37,000 | $645 |
| 2 | exceeds $37,000 but is not more than $41,000 | $645, less an amount equal to 6.5% of the excess |
| 3 | exceeds $41,000 but is not more than $66,667 | $385, less an amount equal to 1.5% of the excess |
If you are less than 18 years of age
(2) Despite subsection (1), the amount of your *tax offset for the income year cannot exceed a cap if:
(a) you are an individual who is a prescribed person in relation to the income year for the purposes of Division 6AA of Part III of the Income Tax Assessment Act 1936; and
(b) part (the excluded part) of your basic income tax liability for the income year is attributable to your eligible taxable income (within the meaning of section 102AD of that Act).
The cap is an amount equal to the remaining part of your basic income tax liability for the income year.
Note: Division 6AA (including section 102AD) is about income that particular kinds of children derive from particular sources.
(3) When working out the remaining part of your basic income tax liability, if you are also entitled to a *tax offset under section 160AAA of the Income Tax Assessment Act 1936, treat that tax offset as having been applied, to the extent possible, against the excluded part of your basic income tax liability.
Note: That tax offset is for individuals eligible for certain benefits.
If you are a trustee and the beneficiary is less than 18 years of age
(4) Despite subsection (1), the amount of your *tax offset for the income year cannot exceed a cap if:
(a) you are a trustee; and
(b) the beneficiary who is presently entitled to the share of *net income to which the tax offset relates is a prescribed person in relation to the income year for the purposes of Division 6AA of Part III of the Income Tax Assessment Act 1936; and
(c) part of your basic income tax liability for the income year is attributable to the portion of that share to which that Division applies.
The cap is an amount equal to the part of your basic income tax liability attributable to the remaining portion of that share.
Note 1: Division 6AA is about income that particular kinds of children derive from particular sources.
Note 2: To work out the portion of that share to which Division 6AA applies, see section 102AG of the Income Tax Assessment Act 1936.
Part 2—Related amendments
Income Tax Assessment (1936 Act) Regulation 2015
2 Section 4 (definition of 159N rebate maximum amount)
Repeal the definition, substitute:
159N rebate maximum amount means $445.
3 Section 4 (definition of 159N rebate reduction rate)
Repeal the definition, substitute:
159N rebate reduction rate means 0.015.
4 Section 4 (definition of 159N rebate reduction threshold)
Repeal the definition, substitute:
159N rebate reduction threshold means $37,000.
Income Tax Assessment Act 1936
5 After subsection 159N(2)
Insert:
(2A) Subsection (1) does not apply for the 2022‑23 year of income or a later year of income.
Note: This section will be repealed on 1 July 2024 by the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018.
Income Tax Assessment Act 1997
6 Section 13‑1 (table item headed “low income earner”)
Omit:
| general.................................................................................... | 159N |
substitute:
| general.................................................................................... | Subdivision 61‑D |
| tax offset for 2021‑22 income year and earlier income years................................................................................. |
159N
|
7 At the end of subsection 63‑10(1)
Add:
Note 7: Item 17 of the table will be repealed on 1 July 2024 by the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018.
Taxation Administration Act 1953
8 Section 45‑340 in Schedule 1 (method statement, step 1, before paragraph (a))
Insert:
(aa) section 61‑110 of the Income Tax Assessment Act 1997 (the Low Income tax offset); or
9 Section 45‑375 in Schedule 1 (method statement, step 1, before paragraph (a))
Insert:
(aa) section 61‑110 of the Income Tax Assessment Act 1997 (the Low Income tax offset); or
Schedule 2—Personal income tax reform
Part 1—Main amendments
Income Tax Rates Act 1986
1 Paragraph 1(b) of Part I of Schedule 7
Repeal the paragraph, substitute:
(b) for each part of the ordinary taxable income specified in the table applicable to the year of income—the rate applicable under that table.
2 Clause 1 of Part I of Schedule 7 (table)
Repeal the table, substitute:
| Tax rates for resident taxpayers for the 2018‑19, 2019‑20, 2020‑21 or 2021‑22 year of income |
| Item | For the part of the ordinary taxable income of the taxpayer that: | The rate is: |
| 1 | exceeds the tax‑free threshold but does not exceed $37,000 | 19% |
| 2 | exceeds $37,000 but does not exceed $90,000 | 32.5% |
| 3 | exceeds $90,000 but does not exceed $180,000 | 37% |
| 4 | exceeds $180,000 | 45% |
Note: The above table will be repealed on 1 July 2024 by the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018.
| Tax rates for resident taxpayers for the 2022‑23 or 2023‑24 year of income |
| Item | For the part of the ordinary taxable income of the taxpayer that: | The rate is: |
| 1 | exceeds the tax‑free threshold but does not exceed $41,000 | 19% |
| 2 | exceeds $41,000 but does not exceed $120,000 | 32.5% |
| 3 | exceeds $120,000 but does not exceed $180,000 | 37% |
| 4 | exceeds $180,000 | 45% |
Note: The above table will be repealed on 1 July 2026 by the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018.
| Tax rates for resident taxpayers for the 2024‑25 year of income or a later year of income |
| Item | For the part of the ordinary taxable income of the taxpayer that: | The rate is: |
| 1 | exceeds the tax‑free threshold but does not exceed $41,000 | 19% |
| 2 | exceeds $41,000 but does not exceed $200,000 | 32.5% |
| 3 | exceeds $200,000 | 45% |
3 Paragraph 4(a) of Part I of Schedule 7
After “the table in clause 1”, insert “that is applicable to the year of income”.
4 Paragraph 1(b) of Part II of Schedule 7
Repeal the paragraph, substitute:
(b) for each part of the ordinary taxable income specified in the table applicable to the year of income—the rate applicable under that table.
5 Clause 1 of Part II of Schedule 7 (table)
Repeal the table, substitute:
| Tax rates for non‑resident taxpayers for the 2018‑19, 2019‑20, 2020‑21 or 2021‑22 year of income |
| Item | For the part of the ordinary taxable income of the taxpayer that: | The rate is: |
| 1 | does not exceed $90,000 | The second resident personal tax rate |
| 2 | exceeds $90,000 but does not exceed $180,000 | 37% |
| 3 | exceeds $180,000 | 45% |
Note: The above table will be repealed on 1 July 2024 by the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018.
| Tax rates for non‑resident taxpayers for the 2022‑23 or 2023‑24 year of income |
| Item | For the part of the ordinary taxable income of the taxpayer that: | The rate is: |
| 1 | does not exceed $120,000 | The second resident personal tax rate |
| 2 | exceeds $120,000 but does not exceed $180,000 | 37% |
| 3 | exceeds $180,000 | 45% |
Note: The above table will be repealed on 1 July 2026 by the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018.
| Tax rates for non‑resident taxpayers for the 2024‑25 year of income or a later year of income |
| Item | For the part of the ordinary taxable income of the taxpayer that: | The rate is: |
| 1 | does not exceed $200,000 | The second resident personal tax rate |
| 2 | exceeds $200,000 | 45% |
6 Paragraph 4(a) of Part II of Schedule 7
After “the table in clause 1”, insert “applicable to the year of income”.
7 Clause 4 of Part II of Schedule 7 (example)
Repeal the example.
8 Clause 1 of Part III of Schedule 7
Omit “following table”, substitute “table that is applicable to the year of income”.
9 Clause 1 of Part III of Schedule 7 (table)
Repeal the table, substitute:
| Tax rates for working holiday makers for the 2018‑19, 2019‑20, 2020‑21 or 2021‑22 year of income |
| Item | For the part of the taxpayer’s working holiday taxable income that: | The rate is: |
| 1 | does not exceed $37,000 | 15% |
| 2 | exceeds $37,000 but does not exceed $90,000 | 32.5% |
| 3 | exceeds $90,000 but does not exceed $180,000 | 37% |
| 4 | exceeds $180,000 | 45% |
Note: The above table will be repealed on 1 July 2024 by the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018.
| Tax rates for working holiday makers for the 2022‑23 or 2023‑24 year of income |
| Item | For the part of the taxpayer’s working holiday taxable income that: | The rate is: |
| 1 | does not exceed $41,000 | 15% |
| 2 | exceeds $41,000 but does not exceed $120,000 | 32.5% |
| 3 | exceeds $120,000 but does not exceed $180,000 | 37% |
| 4 | exceeds $180,000 | 45% |
Note: The above table will be repealed on 1 July 2026 by the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018.
| Tax rates for working holiday makers for the 2024‑25 year of income or a later year of income |
| Item | For the part of the taxpayer’s working holiday taxable income that: | The rate is: |
| 1 | does not exceed $41,000 | 15% |
| 2 | exceeds $41,000 but does not exceed $200,000 | 32.5% |
| 3 | exceeds $200,000 | 45% |
Part 2—Related amendments
Income Tax Rates Act 1986
10 Subsection 3(1) (definition of second resident personal tax rate)
Repeal the definition, substitute:
second resident personal tax rate means the rate mentioned in item 2 of the table in clause 1 of Part I of Schedule 7 that is applicable to the year of income.
11 Subsections 20(1) and (2)
After “table”, insert “applicable to the year of income”.
12 Paragraphs 28(b), 28A(b) and 29(2)(a)
After “table”, insert “applicable to the year of income”.
13 Part IV
Repeal the Part.
14 Repealed law continues for relevant years of income
Despite the repeal of Part IV of the Income Tax Rates Act 1986 by this Part, that Part continues to apply, in relation to assessments for a temporary budget repair levy year, as if that repeal had not happened.
Note: The temporary budget repair levy years are the years of income corresponding to the 2014‑15, 2015‑16 and 2016‑17 financial years (see former section 32 of the Income Tax Rates Act 1986).
15 Subparagraph 2(b)(ii) of Division 2 of Part I of Schedule 8
Repeal the subparagraph, substitute:
(ii) the words “exceeds the tax‑free threshold but” were omitted from item 1 of the table applicable to the year of income in Part I of Schedule 7.
16 Paragraph 2(b) of Part I of Schedule 10
Repeal the paragraph, substitute:
(b) the words “exceeds the tax‑free threshold but” were omitted from item 1 of the table applicable to the year of income in Part I of Schedule 7.
Income Tax (Transitional Provisions) Act 1997
17 Subsection 4‑11(2) (note)
Repeal the note.