Changes to the definition of a Small Business

The definition of a small business has changed and is now law. These changes have been backdated and are effective as at July 1 2016 and will apply in Tax Returns from 2017

A small business is now defined as having an annual turnover of under $10 million, previously this was $2 million

This change allows more businesses to qualify for a range of tax concessions

Are you eligible

To work out if you are eligible for small business entity concessions, you first need to work out if you are a 'small business entity' in an income year. You must review your eligibility each year.

From 1 July 2016, you are a small business entity if you are a sole trader, partnership, company or trust that:

  • operates a business for all or part of the income year, and

  • has an aggregated turnover less than $10 million (the turnover threshold)

Small Business Concessions

These concessions include:

  • Income tax concessions

  • CGT concessions

  • GST and excise concessions

  • PAYG instalment concession

  • FBT concessions

  • Super concessions

Please be aware that limitations have been placed on the following concessions:

  • Income Tax Concessions - the small business income tax offset, has a $5 million turnover threshold, this applies from 1 July 2016

  • capital gains tax (CGT) concessions - which continue to have a $2 million turnover threshold

  • FBT concessions - The turnover threshold for fringe benefits tax (FBT) concessions increased to $10 million from 1 April 2017.

You can find further details on all small business concessions here

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