The key takeaways of the 2014 Federal Budget are set out in a
comprehensive summary prepared by the Moore
Stephens Federal Budget analysts.
Whether you see it as "Pain with a purpose" or a
"Budget of Broken Promises", there were few surprises for
business taxpayers. Company tax rates are confirmed to decrease by
1.5% (to 28.5%); while the Fringe Benefits Tax rate increases to
49%. The Medicare levy is set to rise to 2% and the introduction of
the "temporary deficit" levy sees high income earners hit
with a 2% levy over a three year period from 1 July 2014.
One important outcome is that
franked dividends paid after June may incur more tax. The
corporate tax rate, Medicare and the deficit levy mean taxpayers
should carefully consider the tax outcome of dividends
(particularly where related party loans are involved).
