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

Schedule 3   STS taxpayers

Part 2   Consequential amendments

Income Tax Assessment Act 1997

128   Subsection 61-505(2) (method statement, steps 3, 4 and 5)

Repeal the steps, substitute:

Step 3. Work out the percentage (the small business percentage ) using the formula:

((Your *net small business income for the year / Your taxable income for the year) X 100)
          

If that percentage is more than 100%, the small business percentage is 100%.

Step 4. If your *aggregated turnover for the year is $50,000 or less, multiply the amount at step 2 by the small business percentage: the result is the amount of your *tax offset.

Step 5. If your *aggregated turnover for the year is more than $50,000, work out the fraction (the small business phase-out fraction ) using the formula:

(($75,000 - Your *aggregated turnover for the year) / $25,000)
          

The amount of your *tax offset is worked out using the formula:

((Step 2 amount) X (Small business percentage) X (Small phase-out fraction))