The 2015 budget has seen a new focus on increasing tax breaks for small business, with companies with annual turnover under $2,000,000 to receive a 1.5% tax cut, to 28.5%, while those earning more will continue to pay 30%.
Small businesses that are unincorporated, such as sole traders and partners in partnerships, will be able to reduce their tax liability related to small business profits by 5%, up to a maximum amount of $1,000.
Perhaps the biggest surprise for businesses is the immediate tax deductions for purchases which are under $20,000, rather than having to claim these purchases as deductions over several years. The new policy applies for businesses earning under $2,000,000 in annual turn over. The previous immediate tax write-off threshold was $1,000 per purchase.
The widely discussed introduction of the ‘Netflix tax’, has been proposed to take effect from 1st July, 2017, and will subject international businesses who provide digital services to Australians with the requirement to pay GST. The change will directly impact international corporations with global revenue of $1 billion or more, and have been designed to specifically target those who’ve made steps to avoid paying tax in Australia.
The information contained in this article is general by nature, and is not all-encompassing, nor does not take your personal circumstances into consideration. If you’d like to chat about the budget changes and how these impact your specific circumstances, please contact us, or give the team a call.
ClearWay Advice and Financial Management is a Corporate Authorised Representative Representative No.473095 of Keystone Partnership Pty Ltd ABN 22 169 650 720, Australian Financial Services License (AFSL) No.466137.