Queensland 2019-20 State Budget – What impact will the budget have on your tax agenda?

3 mins  14.06.2019 Craig Bowie, Nicole Gordon, John Riley, Nathan Deveson

Queensland has just announced significant changes to its tax regime through the 2019-20 State Budget which will particularly impact employers, landowners, and the LNG industry.

 


Key takeouts


State taxes in QLD have experienced significant change

Land tax, payroll tax and petroleum tax all have risen

Impacts on state tax compliance requirements

Stamp duty changes minimal

The Queensland 2019-2020 budget has now been delivered and it appears that only stamp duty survived a rate increase.

Land tax

Several changes to land tax to commence from the 2019-2020 assessment / financial year.

The land tax rates for companies and trusts will be increased by 0.25% for each dollar above $5 million from the 2019 – 2020 assessment year. The rates for individuals will not be changed.

The absentee surcharge rate will be increased from 1.5% to 2.0% from 2019 – 2020.

Importantly, the absentee surcharge will be extended to apply to foreign corporations and trustees of foreign trusts, and not merely foreign individuals who reside overseas. The Budget Bill shows that the definition of 'foreign company' for absentee surcharge land tax purposes is very broad.
However, Australian citizens and permanent residents will no longer be classified as absentees from the 2019 – 2020 financial year.

Further details on the implications of these land tax changes will be provided to our clients and contacts soon.

Petroleum

The petroleum royalty rate will be increased by 2.5% to 12.5% from 2019-2020. There will be a transitional arrangement for one year for royalty payers who lodge and pay on an annual basis ending on 31 December 2019. No changes were announced to other royalty rates.
The Queensland Government has also stated that it will be reviewing the current petroleum royalty regime to simplify the regime and identify ways to strengthen the domestic supply.

Payroll tax

There will be an increase in the payroll tax rate by 0.2% to 4.95% for businesses with a payroll above $6.5 million. The tax free threshold will increase from $1.1 million to $1.3 million while the payroll tax rate for non-regional businesses with a payroll up to and including $6.5 million will remain unchanged.
For regional businesses, the tax rate for payrolls up to and including $6.5 million will be reduced by 1% to 3.7% while the tax rate for payrolls over $6.5 million will be reduced by 1% to 3.95%.

Stamp duty

Finally, while there were no stamp duty rate changes announced, the Budget Bill reveals that the definition of consideration has been expanded to include non-monetary consideration, which may impact on development leases, and that new provisions were introduced in relation to a landholder's interests in property through a partnership. 

How can we help?

  • Understanding of key tax changes impacting on QLD organisations
  • How to meet compliance requirements
  • Minimise risks related to tax changes
  • Shape tax strategies to ensure you are well positioned for these changes

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https://www.minterellison.com/articles/queensland-2019-20-state-budget

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