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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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    Eligibility

    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).

    Previously the turnover threshold was $2 million.

    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:

    • $10 million from 1 April 2017 to 31 March 2021
    • $50 million from 1 April 2021.

    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 in Australia or overseas that is:

    • connected with you
    • 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 because of your turnover, you may still be able to access some of these concessions:

    • temporary full expensing
      • for the business portion of the cost of eligible new depreciating assets, if your turnover is less than $5 billion
      • for the business portion of the cost of eligible second-hand depreciating assets, if your turnover is less than $50 million
      • for the business portion of the cost of improvement to eligible depreciating assets, if your turnover is less than $5 billion
    • simpler depreciation rules – instant asset write-off – if your turnover is less than $500 million (for eligible assets that were first used or installed ready for use between 12 March 2020 and 30 June 2021, purchased by 31 December 2020, and the cost was less than $150,000)
    • backing business investment – accelerated depreciation – if your turnover is less than $500 million
    • deductions for professional expenses for start-ups – from 1 July 2020 if your turnover is less than $50 million
    • simplified trading stock rules – from 1 July 2021 if your turnover is less than $50 million
    • immediate deductions for prepaid expenses – from 1 July 2020 if your turnover is less than $50 million
    • two-year amendment period – for income years starting on or after 1 July 2021 if your turnover is less than $50 million
    • capital gains tax concessions – if you pass the $6 million maximum net asset value test
    • excise concession – from 1 July if your turnover is less than $50 million
    • FBT car parking exemption and FBT work-related devices exemption for benefits provided on or after 1 April 2021 if your turnover is less than $50 million
    • PAYG instalments concession from 1 July 2021 if your turnover is less than $50 million.

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      Last modified: 27 Sep 2021QC 52529