In Australia, there are a number of small business tax breaks and concessions which are designed to entice small business. Small business is by far the largest employer in in Australia, providing 80% of the jobs in the Australian economy. The federal tax laws provide a wide range of concessions. These range from simplified compliance requirements to take stiffer rules, reductions and exemptions. Commencing with the 2007/08 income year, a standard eligibility criteria known as a small business entity test applies across a range of concessions which are available under the income tax regimes.
An entity is considered a business of this type if it carries on business and satisfies the two million-dollar aggravated turnover test. No choice or election is needed to attain this business entity status. However, a business entity can choose whether or not to access any one or more of the concessions are available to it.
Any entity that satisfies this test can choose to access a range of concessions, subject to any additional criteria set out in within the concessions. These include, simplified depreciation rules, simplify trading stock rules, special rules for prepaid expenses, annual appointment of GST input tax credits acquisitions and importations are partially creditable, accounting the GST on a cash basis, paying GST by quarterly installments, capital gains tax 15 year asset exemption, capital gains tax 50% active asset reduction, capital gains tax retirement exemption, capital gains tax roll over, fringe benefits tax car parking exemption, and pay-as-you-go installments based on gross domestic product adjusted notional tax… small business tax payers will also qualify for standard two-year period for amending assessments. These entities with an aggregate turnover of less than $750,00 will also be eligible for the entrepreneurs tax offset. Partners in partnerships that are a business entity of this type can also access capital gains tax concessions. Obviously, taxation is a complicated area of law and you should seek advice from a properly qualified professional in order to take advantage of these concessions.