How much does the medical devices tax affect you?
What is the tax rate?
Read moreRead moreIt’s a tax that’s been debated for decades and, while the details are a matter of dispute, the medical tax is a part of the current tax regime, along with all the other taxes that impact the economy, including VAT and corporate taxes.
It was introduced in 2017 and is due to come into effect in 2020.
While the exact rates will be revealed on July 1, 2017, most analysts expect the medical-device tax to be a hefty 2.8% on the average wage, with those earning between $75,000 and $150,000 paying about 6.8%.
The Tax Office said last month it had received nearly 9.3 million applications for tax credits, and it expected some 5.2 million in 2018.
Some employers who want to claim tax credits for medical equipment are likely to be able to do so, given the tax credits available to companies, but the tax system itself is not designed to handle a high-value item like a medical device.
In some states, it is a tax credit that is eligible for only a limited number of items, while in others, it’s not eligible at all.
The Tax Department said the tax credit program is intended to provide tax relief to small businesses that do not have an existing tax liability, and is intended only to offset the tax they pay on the purchase of medical devices.
In 2018, the tax was estimated to raise $3.2 billion.