Australian House of Representatives Proposes a New Bill to Amend Taxation Provisions

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The Australian parliament is considering a new bill to change several tax measures, including how capital gains are treated.

In response to Australia’s growing digital gaming industry, the Australian House of Representatives has recently passed the Treasury Laws Amendment (2022 Measures No. 4) Bill 2022, which includes a tax deduction for eligible digital game development costs.

The Treasury Laws Amendment (2022 Measures No. 4) Bill proposes several fundamental changes to Australia’s tax system, including a digital games tax offset, reforms to the treatment of digital currency, and various measures aimed at boosting skills and training in the tech sector. 

“Companies may be entitled to a refundable tax offset about qualifying Australian development expenditure incurred in completing or porting a digital game or carrying on the ongoing development of digital games in an income year. This offset is designed to support the growth of the digital games industry in Australia by providing concessional tax treatment for Australian expenditure,” the bill stated. 

The proposed bill recognises the growing importance of Australia’s digital gaming industry by approving a tax deduction for eligible digital game development costs. This will benefit Australian digital gaming companies by allowing them to deduct up to 30 per cent of qualified expenditures, with a limit of A$20 million (US$13.3 million) per project.

According to the bill, “the amount of the refundable tax offset for an income year for a company is up to 30% of the sum of the determined totals of qualifying Australian development expenditure specified in certificates issued to the company for the income year.”

Additionally, this bill proposes amendments to several other areas of taxation, such as deductible gift recipients, fringe benefits tax reporting requirements, and superannuation entities. This will include continued non-government-issued digital currency treatment and reduced fringe benefits tax recordkeeping requirements for employers. 

Overall, the bill represents an important step towards modernising tax systems and promoting innovation and growth in key industries.

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