Small business tax thresholds set to change after Senate approves Enterprise Tax Bill
A last minute deal has been struck between the government and Senator Nick Xenophon to pass the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016. The revised Bill enables:
An increase to the aggregated turnover threshold to $10 million for access to small business tax concessions from 2016-17.
Note that the current aggregated turnover threshold of $2 million will be retained for the small business CGT concessions.
Progressive reductions in the corporate tax rate for base rate entities (corporate tax entities that carry on a business with an aggregated turnover of less than $50m) to:
An increase to the aggregated turnover threshold to $5 million for access to the small business income tax offset from 2016-17
An increase to the unincorporated small business tax discount to 8% from 2016-17. The offset will be capped at $1,000.
The final amendments exclude businesses with an aggregated turnover of $50 million or more from the tax cuts. These entities will continue to pay a corporate tax rate of 30%.
The Bill has passed the Senate with amendment and will now go back to the House of Representatives where the Government holds a majority. The next sitting day to formally pass this Bill is 9 May.
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.