Small businesses means whose annual turnover does not exceed $2 million may be able to access a range of tax concession. This applies to all structure (companies, individual, partnership) in which they operate their business.
Taxpayers must work out whether their business is eligible for concession. Then they can adopt one or more tax concessions that suit their business and check particular specific eligibility. They should also check whether they are eligible for each tax year.
Income Tax Concessions
Examine whether they are allowed for the following income tax concessions:
- Simplified trading stock rules
- Simplified depreciation rules
- Immediate deductions for advance expenses, and
- Two- year amendment period
exemption, 50 % active asset reduction, retirement exemption and rollover.
Taxpayers may qualify for one or more of the small business CGT concessions if taxpayers:
- Are a small business entity.
- Don’t carry another business and their assets is used in business by a small business entity that is their affiliate or is connected with them ( passively held assets)
- Are a partner in a partnership and declared as a small business entity and the CGT assets is:
- Taxpayers have interest in partnership assets.
- An asset own by taxpayers is not an interest in a partnership assets (partners assets)or
- Meet the maximum net value assets.
From 2007-2008 onwards taxpayers have better access to the small business CGT concessions if they are:
- A taxpayer who own a CGT asset used in business of an affiliate or connected entity
- A partner who owns a CGT asset used in the partnership business
Also, the asset must meet the active asset test.
If the CGT asset is a share in a company or interest in a trust, one of these additional basic conditions must be satisfied just before the CGT event:
- Taxpayers must be a CGT concession stakeholder in the company or trust
- The entity that owns the share or interest must satisfy the 90% test
In working out whether taxpayers are a small business entity, they need to consider whether they have any affiliates or connected entities.
Check whether they are eligible for PAYG installments which are:
- Gross domestic product- adjusted PAYG installment concessions,
- GST installment ,and
- PAYG installments payment option choice.
If they are eligible for small business entities, they can apply to defer settlement of their excise duty/ custom duties from weekly to monthly. If ATO approved, they can file their return and pay their obligations on or before 21st day of the following month.
To apply for such change business entities must apply in writing to vary their periodic statement permission (PSP).
Taxpayers whose entity is small business organizations are exempt from fringe benefits tax on car parking they provide.
For more information on small business entity concession from ATO website by clicking here