New Tax Incentives for Large Projects
The Federal Government is seeking to unlock billions of dollars in capital for nation building infrastructure through tax incentives for projects worth more than $500 million.
As part of the plan for a stronger economy the Government has released a draft guidance note for the implementation of the new economic infrastructure staples tax concession (the concession) for consultation.
The concession allows the Treasurer to approve applications for a 15% concessional withholding tax rate for economic infrastructure projects, instead of the 30% that would otherwise apply.
To qualify, these major projects must have an estimated capital expenditure of $500 million or more and cover a diverse range of economic infrastructure projects in the areas of transport, energy, communications and water.
The application of this tax rate will apply to projects that are in the national interest and significantly enhance the long term productive capacity of the economy.
This tax incentive will support the development of nationally significant infrastructure, whilst protecting the integrity of Australia’s corporate tax system as well as help to maintain Australia’s international competitiveness.
The concession builds on the Morrison Government’s $100 billion infrastructure investment outlined in the 2019-20 Budget.
The Treasurer stated “by investing in Australia’s infrastructure we will bust congestion, get goods to market more efficiently and effectively and ensure Australians get home sooner and safer, no matter where they live.”
The draft guidance note is available on the Treasury website.