Finally after some much needed discussions and bargaining the Federal Government it seems has been able to get most of its small business tax cuts through parliament with the commencement date for the increase in the company turnover threshold to $10 million from the 2016/17 financial year. What this means practically is that entities which have previously failed the turnover test can now make use of accelerated depreciation pooling and the $20,000 instant write off for assets purchased pre 30 June 2017. Plus companies also get the added benefit of reducing the small business company tax rate from 28.5% to 27.5% for this current year.
The 2017/18 year will see the company turnover threshold to $25 million and then for the 18/19 year to $50 million.
One downside of these rules is that we are now playing with 3 turnover thresholds for small business entities depending on the structure and the tax situation instead of 1. So much for tax simplification!
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