As previously reported here, the Government introduced a Bill into Parliament to increase the aggregated turnover threshold for accessing small business tax concessions to $10 million and reduce the corporate tax rate for small business to 27.5% from the 2016/17 income years.
The Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016 was recently passed by the Senate containing amendments to progressively reduce the corporate tax rate and increase the small business turnover thresholds for access to small business tax concessions. The Bill contains measures that include:
- Small businesses with an aggregated turnover of less than $10m may access most small business tax concessions (except for the CGT concessions under Div 152 of the ITAA 1997);
- Small businesses with an aggregated turnover of less than $5m may access the small business income tax offset.
- The corporate tax rate of 27.5% will apply as follows:
- in 2016/17 for businesses with an aggregated turnover of less than $10m;
- in 2017/18 for business with an aggregated turnover of less than $25m turnover; and
- in 2018/19 for business with an aggregated turnover of less than $25m turnover $50m.
- The corporate tax rate will be progressively reduced to:
- 27% for the 2024/25 income years;
- 26% for the 2025/26 income years; and
- 25% for the 2026/27 and later income years.
As a result of the Bill, businesses that were not able to satisfy the previous requirements to access the small business tax concessions now have more flexibility to choose to apply the rollover relief.
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