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Changed threshold intended for "small business entities" from 1 July 2016
In brief: A Bill has been introduced to increase the small business entity turnover threshold from $2M to $10M for most purposes (but not for the small business income tax offset, for which the turnover threshold is proposed to be $5M). The change is intended to apply from 1 July 2016 and will have a number of implications for small businesses, including imputation changes for companies that qualify as small business entities.
More: The proposed $10M turnover threshold is not to apply for accessing the small business CGT concessions – the existing $2M threshold will continue for that purpose. However, it is the new $10M threshold that will apply for the new small business restructure roll-over. In relation to the associated proposed reduction of the corporate tax rate to 27.5% for small business companies from 1 July 2016, it will no longer be possible to attach franking credits based on the 30% corporate rate. Instead, maximum franking is to be based on the particular company’s tax rate for the income year in which the distribution is paid, assuming that its turnover is the same as for the previous year.
As set out in the Explanatory Memorandum to the Bill, the $10M small business entity threshold is intended to apply for a number of other small business concessions, including immediate deductibility for start-up expenses, simpler depreciation rules, simplified trading stock rules, immediate deductions for certain prepaid business expenses, accounting for GST on a cash basis, etc. [Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016]
05 Oct 2016
Topic: Income Tax/CGT/GST
06 Jun 2016
Topic: CGT/Income tax/Business and investment structures/Trusts
18 Apr 2016
Topic: CGT/Business and investment structures
17 Feb 2016
Topic: Trusts/Business and investment structures/State Taxes
07 Dec 2015
Topic: Business & investment structures/CGT/Trusts
03 Nov 2015
Topic: CGT/Estate Planning/Income Tax