Tax Laws Amendment (Small Business) Act 2007 (80 of 2007)

Schedule 3   STS taxpayers

Part 3   Application and transitional

Income Tax (Transitional Provisions) Act 1997

172   Section 328-120

Repeal the section, substitute:

328-120 Continuing to use the STS accounting method

(1) This section applies if:

(a) you were an STS taxpayer for the most recent income year that started before 1 July 2005; and

(b) you continued to be an STS taxpayer until the end of the 2006-07 income year; and

(c) you used the STS accounting method for the 2005-06 and 2006-07 income years; and

(d) you are a small business entity for the 2007-08 income year.

(2) You can continue to use the STS accounting method:

(a) for the 2007-08 income year; and

(b) for any later income year for which you are a small business entity but only if you used the STS accounting method for the income year before that later year.

Example: You are a small business entity for the 2007-08 and 2008-09 income years and you continue to use the STS accounting method for those years. You are not a small business entity for the 2009-10 income year so you cannot continue to use the STS accounting method for that year. Because you cannot use the STS accounting method for the 2009-10 income year, you will not be able to use it again for a later income year even if you are a small business entity for that later year.