A Better Tax System for Farmers
Income Tax Averaging
As announced in the Agricultural Competitiveness White Paper, primary producers can, from 1 July 2017, re‑commence income averaging 10 years after opting out. Prior to this amendment, a primary producer who had opted out of income averaging could not return to the arrangement*.
Primary producers who opted out of income averaging for the 2006–07, or an earlier financial year, will be opted back in to income averaging for the first financial year after 2016–17 in which their taxable primary production income is greater than that for the previous financial year.
The legislative amendment enacting this change, the Tax and Superannuation Laws Amendment (2016 Measures No. 2) Act 2017 received Royal Assent on 28 February 2017. More information is available on the Australian Taxation Office website.
* Except in special circumstances. See Choosing to restart averaging in certain circumstances for more information.
Farmers affected by drought and natural disasters
The Australian Taxation Office can help people affected by drought and other natural disasters by
In special circumstances, the Commissioner for Taxation may release individuals from payment of income tax, fringe benefits taxes and some other taxes where it is shown that payment would cause serious hardship.
The Tax Office will look at circumstances on a case–by–case basis.
There are a number of taxation measures and concessions available to drought–affected primary producers. These include:
There are also a number of other tax concessions available to primary producers, regardless of their location or if they are in hardship, that can be broadly classified as tax offsets, tax deductions and concessional treatments.
Primary producers can use these mechanisms to reduce their assessable income, and therefore pay less tax. These include:
These relate to expenses that directly facilitate earning income and reduces assessable income. These include:
These relate to a variety of assistance measures for individuals such as deferrals of tax liability that can help to reduce an individual’s assessable income in the current financial year. These include:
For further information on these measures contact the Australian Taxation Office on 13 28 66.
- Phone the Australian Taxation Office on 13 28 66 or
- Visit Primary Producers on the Australian Taxation Office website.