Small business tax cuts

The ATO has introduced new rules, commencing on 1 July 2005, that cut tax payable on small business income by up to 25%.

For the 2006 year, businesses with turnover of less than $50,000 (excluding GST) will receive the tax rebate, reducing the tax payable on business income by 25%. A partial rebate will be available to those businesses with a turnover of less than $75,000.

The rebates are available to businesses run through companies, partnerships and trusts as well as to sole traders. However, there are some restrictions. Additionally, you may not be eligible if you derive Personal Services Income through another entity.

If you operate a small business through a trust, company or partnership and your business income is likely to be less than $75,000 before expenses in 2006, we recommend that you contact us to arrange a review of your affairs. We may be able to restructure your business to ensure that you receive the maximum benefits from the new tax cuts.

Published : 1 September 2005