Finally the Enterprise Tax Bill that was announced in the last Federal Budget has passed through parliament. Here’s a quick summary of what the negotiated bill enables:
- Increase the aggregated turnover threshold to $10 million for access to small business tax concessions from 2016-17.
This means that any businesses with an aggregated turnover of under $10 million can now access a raft of concessions previously only accessible to small businesses under $2 million. The main concession left out is access to the small business CGT concessions, which still requires the entity to pass a $2 million turnover test or a $6 million net asset value test.
- Progressive reductions in the corporate tax rate for businesses with a turnover under $50 million.
Businesses with an aggregated turnover of less than $10 million will benefit from a company tax reduction to 27.5% this financial year.
- For unincorporated businesses such as sole traders, partnerships and trusts:
- An increase to the aggregated turnover threshold to $5 million (up from $2 million) for access to the small business income tax offset from 2016-17, and
- An increase to the unincorporated small business tax discount to 8% from 2016-17. The offset will be capped at $1,000.
This article originally appeared in Your Knowledge by Knowledge Shop.
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