Increase the unincorporated small business tax discount
In the 2016-17 Budget, the Government announced an increase to the tax discount for unincorporated small businesses incrementally over 10 years from 5 per cent to 16 per cent.
From 1 July 2016, the tax discount will increase to 8 per cent, remain constant at 8 per cent for eight years, then increase to 10 per cent in 2024-25, 13 per cent in 2025-26 and reach a new permanent discount of 16 per cent in 2026-27.
The increases will coincide with staggered cuts in the corporate tax rate to 25 per cent. The current cap of $1,000 per individual for each income year will be retained.
The tax discount applies to the income tax payable on the business income received from an unincorporated small business entity.
From 1 July 2016, the discount will be extended to individual taxpayers with business income from an unincorporated business that has an aggregated annual turnover of less than $5.0 million.
Legislation and supporting material
Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016 was introduced to Parliament on 1 September 2016.
Find out more
Small Business - Increased tax discount for unincorporated small businesses.