PAYG reform introduced before Parliament
The Federal Government has introduced legislation before Parliament that will require all large entities in the Pay As You Go (PAYG) instalment system to make their instalments monthly, instead of quarterly.
Federal Assistant Treasurer, David Bradbury, said that no entity will pay increased taxes, but will rather better align large taxpayers with their tax obligations.
"Following consultation, the Government took the decision in the recent Budget to extend the measure to all large entities in the PAYG system. This will ensure that there is a level playing field for all Australian businesses – regardless of their corporate structure," Mr Bradbury said.
“For example, life insurance companies that offer investment services for superannuation funds will ultimately be subject to the same arrangements as superannuation funds themselves.”
The changes will be phased in over almost four years, starting with corporates that have a turnover of $1 billion or more from 1 January 2014. Large entities with a turnover of $20 million or more will have more than three years to prepare for the change.
The Government has also moved to further improve the PAYG instalment regime by giving the Commissioner of Taxation a new power to work with business to determine alternative methods of calculating instalment income, minimising compliance costs.
The Government will also continue to consult with industry to identify longer term reforms to improve the PAYG instalment system for all businesses, large and small. This will include a more detailed examination of a number of proposals that industry brought forward in response to a discussion paper released on 28 February 2013.