Small Business concessions


Company tax rate and dividend payments

The company tax rate of 27.5% will apply for 2017 to all companies with a turnover of less than $10 million.
For the 2018 and 2019 tax years it will also be applied to companies with greater turnovers.

The company tax rate changes will also negatively impact the dividend imputation tax credits for future company dividend payments.
The franking credit rate for 2017 year dividend payments will be 27.5% whereas the small company tax paid rate was 28.5% (2016) and 30.0% (2015 and prior).
The previous year’s extra company tax paid will be trapped in the company franking credit balance.

The small business turnover threshold (for GST and low cost asset write-offs ) is now $10 million, however the small business CGT concessions will continue to use the $2 million turnover threshold or $6 million net assets and the small business tax discount will apply a $5 million turnover threshold.

Small Business restructure rollover (SBRR)

These changes, which apply from July 2016, will allow small business to change their legal structure without incurring a capital gains tax liability.
The changes make it easier for small business owners to restructure, by allowing them to defer gains or losses that would otherwise be made from transferring business assets from one entity to another, as part of a genuine restructure.

Small Business tax concessions

Businesses will also have access to other concessions and impacted by various changes including:

- The continuation of the immediate deduction for individual assets costing less than $20,000 has been extended to June 2018 and also applies to asset costing less than $1,000
- The ATO taxable payments reporting system will apply to contractors in the courier and cleaning industries from July 2018
- Small business can claim prepayments in the year incurred if the benefit does not extend beyond 12 months
- Small business need not perform a stock valuation if the difference between opening and closing stock is less than $5,000
- From July 2018, employers with more than 20 employees will be required to provide real time reports to the ATO for wage payments, SGC contributions, ordinary time earnings and PAYGW

If you have questions, please feel free to contact us.

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