Higher backpacker and DASP tax “poorly handled”: Chartered Accountants

The introduction of the ‘backpacker tax’, and the substantial increase in the tax rate on Departing Australia Superannuation Payments (DASPs) was “poorly handled” and needs review, says the Chartered Accountants of Australia and New Zealand.

A deal between the Government and the Greens set the ‘backpacker tax’ at 15% and increased the tax on DASPs to 65%, instead of the planned 95% DASP tax rate.

CAANZ says the implementation of the changes may be lacking and it could have reduced the number of working backpackers. Read more...

Tax on backpacker super dropped from 95% to 65% in deal with Greens

The Government and the Greens have agreed on setting the ‘backpacker tax’ at 15%, with a decrease from 95% to 65% in the tax on the Departing Australia Superannuation Payments (DASP) of backpackers.

Only last week the Parliament passed a Bill which increased the tax rate on DASPs for backpackers to 95% from 1 July 2017. Currently most backpackers pay 38% tax on these payments.

The Greens have now negotiated a 65% tax rate on DASPs for backpackers, as part of a deal over the so called ‘backpacker tax’. Read more...

Superannuation for backpackers to be taxed at 95%: DASP Bill passes

Update: the tax rate on DASPs for backpackers is likely to go to 65% from 1 July 2017, not 95%, after the Government and Greens reach a deal on the ‘backpacker tax’.

Backpackers will have their superannuation taxed at 95% if they receive a Departing Australia Superannuation Payment (DASP), from 1 July 2017.

The Australian Parliament has passed the Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill 2016, which increases the tax rate on DASPs for backpackers to 95% from 1 July 2017. The Bill says the 95% tax rate applies to DASPs that are “paid to a person on or after 1 July 2017” and “includes amounts attributable to superannuation contributions made while the person was a working holiday maker”.  This is on top of the 15% contributions tax on Superannuation Guarantee contributions. Read more...

Future of 95% DASP tax unclear as backpacker tax debate delayed

Update: the tax rate on DASPs for backpackers is likely to go to 65% from 1 July 2017, not 95%, after the Government and Greens reach a deal on the ‘backpacker tax’.

The future of the Government’s proposed changes to the ‘backpacker tax’ is unclear, along with the 95% tax on Departing Australia Superannuation Payments (DASP) for backpackers, as debate on the Bills has been pushed back.

A Senate committee considering the proposed legislation was due to report on Monday, but when this was delayed until Wednesday so was debate. On Tuesday Labor announced it would attempt to amend the backpacker tax down to a rate of 10.5%. The report was tabled on Wednesday, but the Bills weren’t debated. The Bills were listed on the Senate Notice Paper, but it appears the Government removed them from the list for debate. Labor and Senator Jacqui Lambie attempted to bring on a debate, but this failed. Read more...

Higher DASP tax “inequitable”, could discourage backpackers

The increased tax on superannuation for backpackers has not been welcomed by the superannuation or agriculture industries, though there are differing views on the preferred measures.

The Australian Institute of Superannuation Trustees (AIST) is “concerned” the proposal to tax the Departing Australia Superannuation Payments (DASP) of backpackers at 95%.

“This rate will only apply to two categories of foreign nationals working in Australia, those on 417 or 462 visa subclasses or related bridging visas. All other categories foreign nationals who work temporarily in Australia will be subject to the existing DASP tax rate of 47% if and when they take their superannuation,” says the AIST submission to a Senate inquiry on the Bill. Read more...

DASP to be taxed at 95% for working holiday makers

Update: the tax rate on DASPs for backpackers is likely to go to 65% from 1 July 2017, not 95%, after the Government and Greens reach a deal on the ‘backpacker tax’.

The Government has announced that Departing Australian Superannuation Payments (DASP) for working holiday makers will be taxed at 95% from 1 July 2017. Such payments are currently taxed at between 0% and 47%. This is intended to offset the Budget impact of changes to the ‘backpacker tax’.

The Explanatory Memorandum (EM) to the Bill says: Read more...

Lost superannuation and unclaimed super

Lost superannuation, unclaimed superLost superannuation and unclaimed super are different things, though they can both end up with the same result. Some lost and unclaimed super can is required to be transferred to the ATO, earns only interest at the rate of CPI, and is unlikely to be returned to the owner.

Lost Superannuation

Some lost superannuation can be required to be transferred from a super fund to the ATO. Lost superannuation is super which relates to ‘lost member’.The Superannuation (Unclaimed Money and Lost Members) Act 1999 points to the SIS regulations for the definition of a lost member, in particular regulation SISR 1.03A. This section says there are two kinds of lost members: uncontactable and inactive. Read more...

Departing Australia Superannuation Payment: What is it?

DASP: Departing Australia Superannuation PaymentThe Departing Australia Superannuation Payment, or DASP, allows temporary Australian residents to be paid any superannuation that has accumulated from their employment while in Australia when they leave.

Update: the Government intends to increase the tax on DASPs for backpackers to 95%.

Claiming a Departing Australia Superannuation Payment

There are several requirements for a Departing Australia Superannuation Payment:

  • The member was on a temporary visa, excluding some visa-types, and
  • The visa has ceased, and
  • The member has left Australia

If you think you may be eligible for a Departing Australia Superannuation Payment you should confirm the process with the ATO, as it can change if the benefit is more or less than $5,000. The Departing Australia Superannuation Payment application can only be submitted after leaving Australia, but can be prepared beforehand. The application can be made online online or via a paper form, with the ATO. Read more...

Temporary Budget Repair Levy & Superannuation rates

Temporary Budget Repair Levy - Legislation, Act, BillAnnounced in the 2014 federal budget, the Temporary Budget Repair Levy is an additional 2% tax on individual incomes over $180,000, however it also increases a number of other tax rates. The levy, as legislated, applies for the following financial years:

  • 2014/15
  • 2015/16
  • 2016/17

The following temporary budget repair levy bills relating to superannuation have now passed both houses of parliament:

Income Tax Rates Amendment (Temporary Budget Repair Levy) Bill 2014

Superannuation (Excess Non-concessional Contributions Tax) Amendment (Temporary Budget Repair Levy) Bill 2014 Read more...