Various tax concessions are available to “small business entities".

These include:
the CGT small business concessions, including
- the 15-year asset exemption
- CGT 50% active asset reduction
- CGT retirement exemption;
- CGT roll-over

capital allowance concessions - an immediate deduction for depreciating assets costing less than $1,000, pooling arrangements for other depreciating assets (subject to certain exceptions) and simplified accounting for the private use of depreciating assets:

trading stock concessions - being allowed to ignore the difference between the opening and closing value of trading stock (up to $5,000)

the entrepreneur's tax offset;

an immediate deduction for certain prepaid business expenses;

using the GDP-adjusted notional tax method to work out PAYG instalments;

the FBT car parking exemption; and

GST concessions - choosing to account for GST on a cash basis, annual apportionment of GST input tax credits and choosing to pay GST by instalments

In addition, small business entities and STS taxpayers are excluded from having to make any adjustments under the indirect value shift rules in Div 727 of ITAA 1997

The capital allowance and trading stock concessions are contained in Div 328 of ITAA 1997.

Note that, for small business entities (and STS taxpayers), the standard period during which the Commissioner can amend an assessment is 2 years (rather than 4 years for most other taxpayers engaged in business. This applies in relation to assessments for the 2004-05 or a later income year.


Please note the information contained on this website is general in nature and should not be relied upon as tax advice. Tax Laws change and the information may be out of date. If you have a question please contact Sean Urquhart on 02 8264 0755.