The small business entity turnover threshold will be increased from $2m to $10m from 1 July 2016. The increased threshold means businesses with an annual turnover of less than $10m will be able to access existing small business income tax concessions including:
- the lower small business corporate tax rate (which will be reduced to 27.5% from the 2016/17 income year)
- immediately deductibility for small business start-up expenses under ITAA 1997 s 40-880
- simplified depreciation rules under ITAA 1997 Subdiv 328-D, including the instant asset write off threshold of $20,000 available until 30 June 2017
- simplified trading stock rules under ITAA 1997 Subdiv 328-E
- roll-over for restructures of small businesses under ITAA 1997 Subdiv328-G
- option to account for GST on a cash basis and pay GST instalments as calculated by the ATO
- simplified method of paying PAYG instalments calculated by the ATO, and
- other tax concessions such as the extension of the FBT exemption for work-related portable electronic devices available from 1 April 2016.
The increased $10m threshold will not be applicable for accessing the small business capital gains tax concessions. These concessions will remain available only for small businesses with a turnover of less than $2m or that satisfy the maximum net asset value test. The unincorporated small business tax discount (which will be increased to 8% from 1 July 2016) will however be accessible to small businesses with a turnover of less than $5m.
Source: CCH iKnow