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  • The Simplified Tax System



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    The New Business Tax System (Simplified Tax System) Bill 2000 contains a proposal for a Simplified Tax System (STS) to apply to assessments for income years commencing on or after 1 July 2001. The STS is optional for small business taxpayers who must meet eligibility criteria each year, which include their business (and related businesses) having an STS average annual turnover of less than $1m for the income year and holding depreciating assets (excluding land and buildings) valued at less than $3m at the end of the income year. The STS contains three elements:

    • a cash accounting system
    • a simplified trading stock approach and
    • a simplified depreciation system.

    Pending the introduction of the system, small business taxpayers retain access to:

    • accelerated depreciation-provided certain conditions are met
    • the immediate deduction for plant which costs $300 or less
    • the balancing charge offset, and
    • the 13 month prepayment rule-except in the case of tax shelter arrangements.
    Last modified: 28 Oct 2003QC 27383