The Minister for Transport and Infrastructure Anthony Albanese MP yesterday introduced into Parliament 5 bills to reform Australian Shipping.
The Bills are almost identical to the Draft Bills that were provided to industry in February. See our Shipping Matters! of February 2012 at the following address (access article here).
The Bills ignore most of the Industry comments and the matters we raised in our submission (access article here).
These reforms are welcome but not allowing the tax exempt nature of shipping income to flow through to shareholders may compromise the effectiveness of the reforms in stimulating investment in Australian shipping.
Changes to the Reforms announced in the Draft Bills
Refundable Tax Offset for
Seafarers
The refundable tax offset has been raised to 30% (up from 27%).
The definition of voyage has been widened to include all of the
time on the "voyage" (such as the ballast component)
rather than only to the point of discharge of cargo or passengers.
The definition of salary or wages paid in respect of Australian
resident seafarers has been widened to include payments for leave
accrued during a voyage and payments related to training for such
voyages. These changes are welcome.
Income Tax Exemption
The main change from the draft Bills circulated earlier this month
is the exclusion from eligible shipping activities of "vessels
operating wholly or mainly within a harbour". In the draft
Bill "barges" were excluded and this reference has been
removed as there is no clear meaning of the term.
Temporary Licensing Regime
In response to Industry Comments the Bill now prescribes the
minimum number of voyages to be specified to be 5 (down from 10)
and an acceptable tolerance of 20% up or down in relation to cargo
and/or passengers for the purposes of a temporary licence. There is
a licence category for emergency licences but this is intended to
only be available for natural disasters and the like rather than
commercial emergencies.
Should you wish to discuss this matter please contact your relationship partner or Stephen Adrian.
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