Tax Laws Amendment (2010 Measures No. 1) Act 2010 (56 of 2010)

Schedule 4   25% entrepreneurs' tax offset

Income Tax Assessment Act 1997

8   After section 61-520

Insert:

61-523 25% entrepreneurs' tax offset - reduction for non-small business income

Reduce the amount of your *tax offset worked out under subsection 61-505(2), 61-510(2) or 61-520(2) by the amount worked out using the following formula (but not below nil), if:

(a) you are an individual; and

(b) the amount worked out using the formula is greater than nil:

where:

non-ETO small business income for the income year is worked out by:

(a) adding up the following:

(i) your taxable income for the year;

(ii) your *reportable fringe benefits total for the year;

(iii) your *reportable superannuation contributions (if any) for the year;

(iv) your *total net investment loss for the year; and

(b) subtracting:

(i) in a case covered by subsection 61-505(2) - your *net small business income for the year; or

(ii) in a case covered by subsection 61-510(2) or 61-520(2) - your net small business income share for the year (within the meaning of paragraph 61-510(1)(e) or 61-520(1)(e), whichever is applicable); and

(c) adding the following in relation to each individual (if any) who, on the last day of the year, is your *spouse:

(i) your spouse's taxable income for the year;

(ii) your spouse's reportable fringe benefits total for the year;

(iii) your spouse's reportable superannuation contributions (if any) for the year;

(iv) your spouse's total net investment loss for the year.

Note: ETO is short for 25% entrepreneurs' tax offset.

threshold amount means:

(a) $120,000 if:

(i) on any day during the income year, you have a dependant (within the meaning of the definition of dependant in subsection 159P(4) of the Income Tax Assessment Act 1936, disregarding paragraph (a) (spouse) of that definition); or

(ii) on the last day of the income year, you have a *spouse; or

(b) otherwise - $70,000.