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  • Concessions for small business entities

    Small businesses can access a range of concessions including payment and reporting options. This applies to sole traders, partnerships, companies or trusts.

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    To qualify for these concessions, you need to confirm your business is a 'small business entity' for the income year. You need to review this each year.

    From 1 July 2016, you are a small business entity if you are a sole trader, partnership, company or trust, that both:

    • operates a business for all or part of the income year
    • has an aggregated turnover that is less than $10 million (the turnover threshold).

    When we say:

    • 'small business' – we mean 'small business entity'
    • 'turnover – we mean 'aggregated turnover'.

    The $10 million turnover threshold applies to most concessions, except for:

    • the small business income tax offset, which has a $5 million turnover threshold
    • the capital gains tax (CGT) concessions, which have a $2 million turnover threshold.

    The turnover threshold for the fringe benefits tax (FBT) concessions is:

    • $2 million up to 31 March 2017
    • $10 million from 1 April 2017.

    For previous income years, to be eligible for all small business entity concessions, your turnover needs to be less than $2 million.

    Work out if you're a small business entity

    You are a small business entity for the current income year if your turnover is either:

    • less than $10 million in the previous income year
    • estimated to be less than $10 million for the current year
    • actually less than $10 million at the end of the current year.

    There are some restrictions about how and when you can estimate your turnover for the current year. Some concessions won't be available if you use your actual turnover to qualify.

    If you are completing a tax return for 2015–16 or an earlier income year, your estimated turnover for that year, as well as one of the two previous income years, must be less than $2 million.

    Aggregated turnover

    Aggregated turnover is generally your annual turnover plus the annual turnover of any business:

    • connected with you
    • that is your affiliate.

    Annual turnover is all ordinary income you earned in the ordinary course of running a business for the income year.

    It's your gross income, rather than your net profit. When working this out exclude any GST amounts you charge on a transaction.

    There are aggregation rules that determine whether you need to include the annual turnover of another entity in your aggregated turnover.

    If you're not a small business

    If you're not a small business in an income year, you may still be able to access the:

    • capital gains tax concessions – if you pass the $6 million maximum net asset value test.
    • FBT car parking exemption – if in the income year ending just before the start of the relevant FBT year, your gross total income was less than $10 million.

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      Last modified: 07 May 2020QC 52529