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  TAX - I to ZOffsets/Rebates-Not RefundableEntrepeneurs Tax Offset      Monday, 25 January 2021  

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Entrepeneurs Tax Offset (ETO)


Not refundable.  These offsets can be used to reduce tax payable, but are not refundable, nor are they available to offset the Medicare levy.

 

   

The Entrepeneurs Tax Offset ceased on 30 June 2012.

 


   
Overview

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,

where:

> 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. 

 


This page was last modified 28 December 2020

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