From 1 July 2005
The Entrepreneurs Tax Offset (ETO) was available for assessments relating to income years starting on or after 1 July 2005, initially for businesses in the STS system up to 30 June 2007 and later for Small Businesses Entities (SBE).
A small business entity is a business entity with an aggregated turnover of $2 million or less, in the prior or current financial year.
The ETO allowed a tax offset (rebate) equal to 25% of the income tax liability attributable to the business income of a business in the STS/SBE systems with an annual group turnover of $50,000 or less.
If the STS/SBE group turnover was more than $50,000, the ETO was progressively phased out so that the offset ceased once the STS/SBE turnover reached $75,000.
The tax offset was non-refundable.
The ETO was available to:
> an individual or a company that was an STS taxpayer
> a partner in an STS partnership, and
> a trustee or beneficiary of an STS trust, depending on who was liable for tax on the trust income,
> the STS group turnover for the year was less than $75,000, and
> they had net STS/SBE income for the year (that is, the STS annual turnover had to be more than the allowable deductions that relate to that turnover).
From 1 July 2009
The application of the family income test for the Entrepreneurs Tax Offset applied from the 2009/2010 financial year. Under the income test, the offset was reduced by 20 cents for every dollar that the non-ETO small business income exceeded the following thresholds:
- Single $70,000 or Family $120,000.
- Income for this purpose includes:
Taxable income, reportable superannuation contributions, reportable fringe benefits and net investment loss(es).
See the links below for more information.