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Small business income - for small business tax offset (sbi)

From the 2016-17 income year, a partner (who is an individual), may be entitled to a tax offset on the tax payable on their share of net small business income earned by a partnership that is a small business entity.

Partnerships that are small business entities will need to work out the partnership's net small business income and the partner's share of that income.

Small business eligibility

Is the taxpayer a small business entity?

Expanded access to small business concessions:

From 1 July 2016, a range of small business tax concessions became available to all businesses with a small business entity aggregated turnover threshold for a range of small business concessions increased from $2 million to less than $10 million.

The $10 million aggregated turnover threshold applies to most of the small business concessions, except for:

  • the small business income tax offset, which is available to businesses with aggregated threshold turnover of less than $5 million from 1 July 2016 (available to be claimed by the individual partners) and the offset is increased to 8% capped at $1,000.

  • capital gains tax (CGT) concessions for small business continue to have an aggregated turnover threshold of $2 million.

The aggregated turnover threshold for the fringe benefits tax concessions increases to $10 million from 1 April 2017.

You must answer this question and confirm eligibilty every year for the system to calculate net small business income. Then, the partners of a partnership can receive their distribution share of the small business entity partnership net income. By confirming eligibility, small business entities can use the small business simplified depreciation rules.

Press [Enter] at this question to open the Small Business Entity worksheet (sbe). The answer to both eligibility questions in the worksheet must be Y. Press [Alt+S] at question 2 to open the Small business entity aggregated turnover worksheet (sat). You may also access the sbe worksheet from the depreciation worksheet (d) and if you have done so the eligibility question will already be answered.

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