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For a more in depth analysis on key aspects of the announcements, click through on our blog articles “Super Robin?”, “Malcolm in the middle” and “Revving the ‘Small Business’ engine of economy”.

But now to our overview of the 2016 Federal Budget speech -

  • Individuals
    • From 1 July 2016 personal tax rates will change, increasing the 32.5% rate threshold from $80,000 to $87,000.
    • The 2% Temporary Budget Repair Levy will expire at the end of the 2017 income year, therefore reducing the highest marginal tax rate to 45%.
    • No increase for indexation to the income thresholds for the Medicare Levy Surcharge and Private Health Insurance Rebate to 1 July 2021.
  • Business
    • Staged reduction of the company tax rate over 10 years to 25%.
    • From 1 July 2016, small business company tax rate reduced to 27.5%.
    • Greater access to small business tax concessions by lifting the annual turnover threshold from $2 million to $10 million from 1 July 2016.
    • Simplification of the application of Division 7A.
    • A number of small business tax concessions will extend to more businesses with the increase of the annual turnover threshold from $2 million to $10 million
    • Turnover threshold for access to the unincorporated small business threshold for individuals increased to $2 million to $5 million
  • Superannuation
    • $1.6 million cap on super transfers to retirement balances, meaning that members in pension phase with balances greater than $1.6 million will now have a separate accumulation account for the excess balance and pay tax on superannuation earnings at 15% effective from 1 July 2017.
    • $500,000 lifetime non-concessional contributions cap (after tax) from 7.30pm on 3 May 2016 (e.g. effective immediately).
    • Concessional contributions tax increase and reduction in concessional contributions cap from 1 July 2017 for taxpayers with incomes of $250,000 or more.
    • Proposal to remove the exemption on profits/earnings in pension accounts where members have commenced a transition to retirement pension from 1 July 2017.
    • All taxpayers will be able to claim a tax deduction for personal superannuation contributions irrespective of their employment circumstances from 1 July 2017 up to $25,000 contribution cap.
    • Removal of “work test” for superannuation contributions.
    • Low income Superannuation Tax Offset up to $500.
  • International Tax
    • Anti-avoidance measures announced to tackle multinationals operating in Australia.
    • Introduction of a Diverted Profits Tax from 1 July 2017 imposing a penalty of 40% on profits that are diverted offshore through related party transactions.
    • From 1 July 2017 GST will be extended to low value goods imported by consumers and overseas suppliers will collect and remit GST for these goods.

For further explanation on any of the budget announcements, call the MKS Group team on 03 9374 8400 or email us at This email address is being protected from spambots. You need JavaScript enabled to view it. .

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  • “MKS, Mark Said has been involved in our business for over 18years. What’s apparent about Mark and all his team, is their integrity and honesty; you can trust their advice and judgement. Mark is always accessible and he and his staff genuinely... View More..

    “MKS, Mark Said has been involved in our business for over 18years. What’s apparent about Mark and all his team, is their integrity and honesty; you can trust their advice and judgement. Mark is always accessible and he and his staff genuinely care about our business.
    Nine years ago we restructured, MKS helped us with a new business plan and setting up the new structure. Over the years, as our business has grown, Mark has provided strategies to make sure our bottom line continuously improves. He is also very well connected across industries, with an excellent network of additional suppliers that we can access as our business needs them.”
    For more information on BWS Recruitment: http://www.bwsrecruitment.com.au

    Belinda Wiggins – BWS Recruitment

  • MKS Group provides very good service, they seem to take more care and give more effort than other accounting firms. You can always get onto them which is really important. I started using them about 12 months ago and since then they've helped me... View More..

    MKS Group provides very good service, they seem to take more care and give more effort than other accounting firms. You can always get onto them which is really important. I started using them about 12 months ago and since then they've helped me work out my costings so my company has better efficiencies. They also provide really useful information to help save money on taxes and have a network of professionals for give financial planning information and guidance. They're a great bunch at MKS.
    For more information on Rapid Concrete: http://rapidconcrete.com.au/index.htm

    Cain Rattray – Rapid Concrete

  • Mark and his team at MKS Group are a real asset to my business, in fact I consider them as a part of my team. We’ve been using them for over 7 years and what I appreciate most is that Mark makes me accountable to achieve my business goals. MKS... View More..

    Mark and his team at MKS Group are a real asset to my business, in fact I consider them as a part of my team. We’ve been using them for over 7 years and what I appreciate most is that Mark makes me accountable to achieve my business goals. MKS ensures my business performs with regular meetings and an automated accounting system of XERO Xero so that I have my fingers on the pulse of the finances day-to-day.
    They say knowledge is power. Thanks to the vital advice and training of MKS, I now understand balance sheets, budgeting and cash flow, and can confidently forecast on my P&L in the future. ‘It’s fantastic to have business know-how and confidence.

    For more information on Key Business Advisors – contact: https://keyba.com.au/ show less

    Colin Wilson – Key Business Advisors

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