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Taxes

Taxes
Income-splitting debate returns to Australian tax
Imagine a tax structure that allows income earned by one person to be split across multiple taxpayers - typically within a family, to one partner with a lower marginal tax rate - to reduce the total tax paid by the household. Similar structures already exist within European economies like France and Germany, and if the recently elected Nationals leader Matt Canavan has his way - it will become part of the Australian tax system. Germany’s [tax] system focuses on married couples or civil partnerships, regardless of children, whereas in France - which considers the household as one tax unit - the total income is not taxed directly; instead, it is divided by a number of "shares" or "units" based on the family structure. Canavan is proposing that there are significant benefits in taxing families as opposed to individuals, but it would come at a cost. According to Parliamentary Budget Office estimates, it would cost the federal budget around $70 billion over the decade.Family-friendly taxWhile this may explain why there’s no current appetite or policy intent to introduce general family income splitting, Canavan argues that the change would make the tax system more “family-friendly” by recognising that many families share res
Taxes
Colombia's richest citizens could face higher taxes
Colombia’s richest citizens are about to face a more than threefold increase in the top rate of wealth tax on their assets alongside higher levies on salaries and luxury goods. This comes as President Gustavo Petro attempts to raise 26.3 trillion pesos (US$6.5 billion) in one of the most ambitious attempts to boost revenue in recent years, with the finance ministry seeking to narrow the fiscal deficit and avoid spending cuts. "We are structuring a proposal that guarantees not only that we finance 2026, but that we are providing medium-term macroeconomic stability," Finance Minister German Avila told journalists, adding that the measures "will be of use to the next government". The tax bill sent to Congress on Monday proposed an increase in the wealth tax rate to 5% from 1.5% and would slash the threshold at which it becomes payable. The top marginal rate of income tax on individuals would rise from 39% to 41% and there would also be a boost in luxury goods like yachts. The bill also creates a 1% tax on oil and coal extraction and proposes a 30% tax on dividends received by non-residents. It also proposed that companies in the financial sector, like brokerages and insurance companies, pay a corporate tax of 50%. T
Taxes
Proposed super tax sparks capital gains reform talk
Despite an avalanche of objections to the Federal Government’s new super tax reform – dubbed Division 296 - Treasurer Jim Chalmers remains unwilling to budge on proposed tax changes that take effect 1 July. Unless you’ve been living in a cave, you’ll know that Division 296 effectively doubles the tax on the earnings of superannuation balances over $3 million. Initially shelved late in 2024, this new super tax is expected to help democratise the super tax playing-field, which currently favours those with higher balances over those at the other end of the scale. While the super fund system was set up in the early 1990s as a tax-effective vehicle aimed at maximising retirement income, the Gratton Institute has repeatedly argued that tax concessions [still available through super] disproportionately favour the top 20% of income earners. Fuelling Gratton’s grievances with the tax system on super are revelations that combined concessions on contributions and earnings – worth around $50 billion annually – cost more than the age pension itself. Given that the typical fund member is a net saver in retirement – meaning their balances will continue to grow for decades after retirement – Gratton also argues that super is morphi
Taxes
Last-minute EOFY tips: Boost your tax return now
While the Australian Taxation Office (ATO) refunds billions of dollars to over three quarters of all taxpayers annually, it can take a little effort to ensure you get as much tax back as you can. H&R Block estimates that Australian taxpayers receive on average around $2,800 in tax refunds annually. However, there’s no guarantee that two people earning the same income will receive the same tax refund. That’s because many Australians fail to maximise the tax deductions they’re legally entitled to, and even worse, ATO estimates suggest around 200,000 taxpayers who failed to lodge tax returns last year would not have received a refund.Get your financial ducks in a rowWhile tax deductions are the easiest way to maximise your tax refund, there’s some homework to be done to ensure you maximise the tax you get back. Much of this homework revolves around good record keeping, to ensure everything you claim as a tax deduction is substantiated with a valid receipt. For example, if you’re claiming driving expenses for a car you own, make sure they’re dated along with dates and mileage. It’s no different when claiming back charitable donations for any amount over $2, so make sure you retain all receipts.What’s in the mix?Most
Taxes
End of FY25 planning: Tax-time tips and traps to avoid
With the end of the financial year rapidly approaching, now is the perfect time to capitalise on the tax considerations available to all Australian investors. Legitimately minimising the tax you pay on shares (or any asset class) is something every investor should strive for. With that in mind, Azzet has added to the guide to capital gains tax on shares we shared with readers in March, with some additional insights into expensive mistakes you need to avoid. We've also provided some often overlooked insights into cutting tax by making deductible super contributions.Avoid tax loss harvestingTax rules allow you to offset any capital losses against capital gains realised [on shares], and if you’ve owned the shares for over a year, you’ll receive a capital gains discount of 50%. However, what the Australia Tax Office (ATO) doesn’t deem as kosher is the quick sale and repurchase of shares with the singular purpose of minimising tax. Remember, it’s perfectly acceptable to cull deadwood stocks that have been diluting your overall share portfolio value for some time. But what the ATO takes a dim view of is selling shares and then buying the same or [similar] amount back within a relatively short timeframe. The ATO may dee

Taxes
$3m super tax debated as low-income offsets ignored
The market’s preoccupation with the $3 million super tax appears to be overshadowing what’s happening to super fund provisions that used to boost retirement savings for the younger, low-income cohort at the other end of the wealth divide. Based on Cbus research, the current income threshold is leaving a growing cadres of low-income earners without access to the Low-Income Super Tax Offset (LISTO) they once took for granted. Based on Cbus’ research the number of its members receiving LISTO has declined over the past five years due to the income threshold remaining unchanged since its introduction in 2017. What’s becoming increasingly evident, says Cbus deputy CEO Marianne Walker is that the current freeze is not only affecting many members, it's also having an equally negative impact across all industry sectors. Under the current settings, an apprentice earning $27,778 annually would reach their maximum LISTO entitlement early - long before they receive the full benefit.Super isn't keeping up"Many young tradies, apprentices, and women in construction start their careers on low pay while learning their trade, yet the system isn't keeping up," Walker said. "Raising the LISTO threshold to $45,000 makes sense. It's a dir
Taxes
'Robin Hood' Greens announce plan to tax billionaires
Billionaires in Australia could soon face a new wealth tax as the Greens announced their latest plan to tax big corporations to pay for essential services and tackle the cost of living crisis. Under the proposal from the Greens, Australia’s 150 billionaires would pay an annual 10% tax on their net wealth with a 10% limit on capital flight in any year. Effectively, curbing the ability of some of the country's richest people to shift their wealth offshore to escape the tax. “There has been an obscene accumulation of wealth in this country in recent years. A billionaires’ tax will start to turn that around and help everyday Australians,” said Nick McKim, an Australian Greens Economic Justice Spokesperson. According to Greens-commissioned costings from the Parliamentary Budget Office (PBO), the party says the plan is expected to raise A$23 billion over the forward estimates and $50 billion over the decade. “It’s time we turned the tables and made billionaires pay their fair share to fund the services people need,” said party leader Adam Bandt. This comes as the latest pledge to voters by way of a series of “Robin Hood reforms” from the Greens ahead of this year’s federal election. A new tax on wealth above $1 bill
Taxes
Actuaries Institute proposes raft of super tax reforms
The Actuaries Institute has recommended a superannuation tax reform package that would add a uniform tax on earnings across Australian accumulation and retirement accounts. The institute also supports a tax on high withdrawals in retirement, simplifying bequest tax rules, and uniform taxes across contributions once invested in a superannuation fund, it said in a discussion paper today. “We have a superannuation system that’s working, but it’s one of the most complex in the world,” said actuary Richard Dunn, the paper’s co-author. “Our proposals make super simpler for consumers and funds, while improving equity across the system. Further, the reforms encourage people to spend their super by reducing the attraction of using super to accumulate tax-free bequests.” According to the Actuaries Institute, these changes would eventually save around A$1 billion in fund operational costs per year. The paper recommends a uniform tax of 10% on superannuation earnings, rather than the existing 15% tax paid during accumulation and no tax paid by retirees. The institute proposes a tax on retirees withdrawing high amounts from their superannuation funds, such as lump sums above $250,000 or pension benefits above $150,000 per ann
Taxes
Global inheritance tax: A comparative snapshot
Inheritance tax, also known as estate tax, varies widely across the globe, impacting how wealth is transferred from one generation to the next. Australia: Unlike many countries, Australia has no inheritance or estate tax. However, beneficiaries may face capital gains tax (CGT) if they sell inherited assets.Labor Party: The Labor Party has consistently denied any plans to introduce an inheritance tax, often referred to as a "death tax". Despite claims from opponents, Labor maintains that families should have the autonomy to manage their financial decisions without government intervention.Coalition: The Coalition has used the threat of a "death tax" as a scare tactic against Labor, but there is no evidence to support these claims. The Coalition itself has not proposed any inheritance tax and continues to emphasise lower taxes and economic growth.Neither major party in Australia at present supports the introduction of an inheritance tax, focusing rather on other economic policies. Australia did have an inheritance tax, known as ‘death duty’, until 1979. Before then, any money inherited from a deceased person was subject to a tax. The rate varied over the years, and at its peak, the rate could go up to 75% on estates above a cer