Be aware of the different small business thresholds
There are various tax breaks available for small businesses depending on whether the business structure is a company, partnership, trust or sole trader:
- For this current year ending 30 June 2018, companies with an aggregated turnover of less than $25 million will only pay tax at 27.5% (companies with an aggregated turnover of $25 million or more will pay tax at 30%); and
- For the year ended 30 June 2017 and onwards, non-corporate small businesses (e.g. sole traders, partnerships or trusts) that have an aggregated turnover of less than $5 million, can reduce the tax the individual (e.g. sole trader, partner of a partnership or beneficiary of a trust) pays by 8% (up to a maximum discount of $1,000) per income tax year.
Furthermore, any business (whether corporate or non-corporate) that is a small business entity (SBE) with an aggregated turnover of less than $10 million a year, may qualify for further concessions (e.g. $20,000 instant asset write-off and simplified depreciation, small business restructure rollover and an immediate deduction for business start-up costs and prepaid expenses) in addition to those concessions mentioned above.
Mineral exploration companies to take action before 30 September 2017
Small Australian mineral exploration companies that want to participate in the exploration development incentive (EDI) program in respect of the year ended 30 June 2017, must lodge their exploration development incentive participation form by 30 September 2017 (detailing their estimated 2017 exploration expenditure and tax loss).
The benefits of partaking in the EDI program is that participant companies can provide exploration credits (i.e. a type of offset from converting a portion of the company’s tax losses) to their investors to attempt to stimulate investments in such Australian prospecting companies.
Please contact us if you are interested in partaking in the exploration development incentive program or need assistance in preparing and lodging the application form.
Overseas individuals must repay their HELP and TSL debts
The Government provides financial assistance [i.e. Higher Education Loan Programme (HELP) or Trade Support Loan (TSL)] to individuals to undertake higher education, trade apprenticeships and other training programs.
The 2017 income tax year is the first year where non-residents will have to make repayments (i.e. first payment may have to be made on 31 October 2017) of such HELP and TSL debts if their worldwide income exceeds the repayment threshold (that is $54,869 for the 2017 income tax year). Before 2017, foreign source income was not included in calculating the threshold so non-resident individuals only deriving foreign source income did not need to repay their HELP and TSL debts.
If you or your children currently have outstanding HELP or TSL debts and are either living overseas or intend to go overseas, please talk to your Nexia adviser to ensure they comply with these new measures.