Archival News - 2006
2006-05-15
Tax Offset for Small Entrepreneurs
If your business has an annual turnover of less than $75,000 you may be eligible for a tax offset of up to 25% on that business income.
The Entrepreneurs Tax Offset (ETO) is a new measure available to individuals, companies, partnerships or trusts that are in the simplified tax system (STS) and applies from 1 July 2005. If you're an individual, wage and investment income will not effect your eligibility to claim the tax offset.
If your STS group turnover (or STS annual turnover if there is no grouping) is less than $75,000 then the ETO will be calculated on your net STS income, which takes into account the deductions attributable to the turnover. The maximum tax offset of 25% will be used for businesses with turnover up to $50,000 and this rate will reduce/phase out up to the limit of $75,000 turnover.
Where business deductions are greater than the STS turnover (net loss), the ETO will not be available to the STS taxpayer.
Slightly different methods apply when calculating the eligibility for the ETO for partners in a partnership and for beneficiaries of a trust. In essence, the turnover in the partnership or trust will determine the eligibility of the individual recipients.
For further details on how the ETO is calculated or whether you may be eligible, please contact our office on (02) 9555 1309.
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