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This is a Bill, not an Act. For current law, see the Acts databases.
2013-2014-2015
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Tax Laws Amendment (Small Business
Measures No. 3) Bill 2015
No. , 2015
(Treasury)
A Bill for an Act to amend the law relating to
taxation, and for related purposes
No. , 2015
Tax Laws Amendment (Small Business Measures No. 3) Bill 2015
i
Contents
1
Short title ........................................................................................... 1
2
Commencement ................................................................................. 1
3
Schedules ........................................................................................... 2
Schedule 1--Tax discount for unincorporated small businesses
3
Part 1--Main amendments
3
Income Tax Assessment Act 1997
3
Part 2--Other amendments
7
Income Tax Assessment Act 1997
7
Part 3--Application of amendments
8
Schedule 2--Immediate deductibility for small business
start-up expenses
9
Income Tax Assessment Act 1997
9
Schedule 3--FBT and portable electronic devices
11
Fringe Benefits Tax Assessment Act 1986
11
No. , 2015
Tax Laws Amendment (Small Business Measures No. 3) Bill 2015
1
A Bill for an Act to amend the law relating to
1
taxation, and for related purposes
2
The Parliament of Australia enacts:
3
1 Short title
4
This Act may be cited as the Tax Laws Amendment (Small
5
Business Measures No. 3) Act 2015.
6
2 Commencement
7
(1) Each provision of this Act specified in column 1 of the table
8
commences, or is taken to have commenced, in accordance with
9
column 2 of the table. Any other statement in column 2 has effect
10
according to its terms.
11
12
2
Tax Laws Amendment (Small Business Measures No. 3) Bill 2015
No. , 2015
Commencement information
Column 1
Column 2
Column 3
Provisions
Commencement
Date/Details
1. The whole of
this Act
The day this Act receives the Royal Assent.
Note:
This table relates only to the provisions of this Act as originally
1
enacted. It will not be amended to deal with any later amendments of
2
this Act.
3
(2) Any information in column 3 of the table is not part of this Act.
4
Information may be inserted in this column, or information in it
5
may be edited, in any published version of this Act.
6
3 Schedules
7
Legislation that is specified in a Schedule to this Act is amended or
8
repealed as set out in the applicable items in the Schedule
9
concerned, and any other item in a Schedule to this Act has effect
10
according to its terms.
11
Tax discount for unincorporated small businesses Schedule 1
Main amendments Part 1
No. , 2015
Tax Laws Amendment (Small Business Measures No. 3) Bill 2015
3
Schedule 1
--Tax discount for unincorporated
1
small businesses
2
Part 1
--Main amendments
3
Income Tax Assessment Act 1997
4
1 At the end of Division 328
5
Add:
6
Subdivision 328-F--Small business income tax offset
7
Guide to Subdivision 328-F
8
328-350 What this Subdivision is about
9
You may be entitled to a tax offset if you are an individual:
10
(a)
who is a small business entity; or
11
(b)
whose assessable income includes a share of the net
12
income of an unincorporated small business entity.
13
Table of sections
14
Operative provisions
15
328-355 Entitlement to the small business income tax offset
16
328-360 Amount of your tax offset
17
328-365 Net small business income
18
328-370 Relevant attributable deductions
19
328-375 Modification if you are under 18 years old
20
Operative provisions
21
328-355 Entitlement to the small business income tax offset
22
You are entitled to a
*
tax offset for an income year if you are an
23
individual:
24
(a) who is a
*
small business entity for the income year; or
25
Schedule 1 Tax discount for unincorporated small businesses
Part 1 Main amendments
4
Tax Laws Amendment (Small Business Measures No. 3) Bill 2015
No. , 2015
(b) whose assessable income for the income year includes a
1
share of the
*
net income, for the income year, of a small
2
business entity that is not a
*
corporate tax entity.
3
Note:
This section does not apply to an individual in his or her capacity as
4
the trustee of a trust (see subsection 960-100(4)).
5
328-360 Amount of your tax offset
6
(1) The amount of your
*
tax offset is equal to 5% of the following:
7
Your total net small business income
for the income year
Your basic income tax
liability for the income year
Your taxable income for the income year
8
where:
9
your total net small business income for the income year means
10
so much of the sum of the following as does not exceed your
11
taxable income for the income year:
12
(a) your
*
net small business income for the income year, if you
13
are a
*
small business entity for the income year;
14
(b) your share of a small business entity's net small business
15
income for the income year that is included in your
16
assessable income for the income year, less your deductions
17
to the extent that they are attributable to that share and
18
covered by section 328-370.
19
For the purposes of paragraph (b), disregard small business entities
20
that are
*
corporate tax entities.
21
Note:
If you are under 18 years old, your total net small business income
22
will probably be worked out under section 328-375.
23
(2) However, the amount of your
*
tax offset is $1,000 if the amount
24
worked out under subsection (1) exceeds $1,000.
25
Note:
Your tax offset is capped at $1,000 regardless of the number of small
26
business entities that cause you to be entitled to the tax offset for the
27
income year.
28
328-365 Net small business income
29
(1) A
*
small business entity's net small business income for an
30
income year is the result of:
31
Tax discount for unincorporated small businesses Schedule 1
Main amendments Part 1
No. , 2015
Tax Laws Amendment (Small Business Measures No. 3) Bill 2015
5
(a) working out the entity's assessable income for the income
1
year to the extent that it relates to the entity carrying on a
2
*
business, but disregarding:
3
(i) any
*
net capital gain; and
4
(ii) any
*
personal services income not produced from
5
conducting a
*
personal services business; and
6
(b) subtracting the entity's deductions to the extent that they are
7
attributable to that assessable income and covered by
8
section 328-370.
9
(2) However, the entity's net small business income for the income
10
year is zero if that result is less than zero.
11
328-370 Relevant attributable deductions
12
For the purposes of this Subdivision, this section covers all
13
attributable deductions other than any under:
14
(a) section 25-5 (about tax-related expenses); or
15
(b) Division 30 (about gifts or contributions); or
16
(c) Subdivision 290-C (about personal superannuation
17
contributions).
18
328-375 Modification if you are under 18 years old
19
(1) Despite subsection 328-360(1), your total net small business
20
income for the income year is worked out under this section if you
21
are a prescribed person (within the meaning of section 102AC of
22
the Income Tax Assessment Act 1936) for the income year.
23
(2) Your total net small business income for the income year is the
24
result of:
25
(a) working out your business income (within the meaning of
26
subsection 102AE(5) of that Act) for the income year to the
27
extent that it relates to you carrying on:
28
(i) a
*
business as a
*
small business entity for the income
29
year; or
30
(ii) a business as a partner in a partnership, if the
31
partnership is a small business entity for the income
32
year; and
33
Schedule 1 Tax discount for unincorporated small businesses
Part 1 Main amendments
6
Tax Laws Amendment (Small Business Measures No. 3) Bill 2015
No. , 2015
(b) subtracting your deductions, and each partnership's
1
deductions, to the extent that they are attributable to that
2
business income and covered by section 328-370.
3
(3) However, your total net small business income for the income
4
year is:
5
(a) zero if that result is less than zero; or
6
(b) equal to your taxable income for the income year if that result
7
exceeds that taxable income.
8
Tax discount for unincorporated small businesses Schedule 1
Other amendments Part 2
No. , 2015
Tax Laws Amendment (Small Business Measures No. 3) Bill 2015
7
Part 2
--Other amendments
1
Income Tax Assessment Act 1997
2
2 Section 13-
1 (after table item headed "sickness benefits")
3
Insert:
4
small business
small business income ......................................................... Subdivision 328-F
3 At the end of section 328-5
5
Add:
6
You may be entitled to a tax offset for any small business income
7
included in your assessable income, if you are an individual
8
(Subdivision 328-F).
9
4 Subsection 328-10(1) (after table item 6)
10
Insert:
11
6A
Small business income tax offset
Subdivision 328-F of
this Act
5 Subsection 995-1(1)
12
Insert:
13
net small business income, of a
*
small business entity, has the
14
meaning given by section 328-365.
15
Schedule 1 Tax discount for unincorporated small businesses
Part 3 Application of amendments
8
Tax Laws Amendment (Small Business Measures No. 3) Bill 2015
No. , 2015
Part 3
--Application of amendments
1
6 Application of amendments
2
The amendments made by this Schedule apply to assessments for the
3
2015-16 income year and later income years.
4
Immediate deductibility for small business start-up expenses Schedule 2
No. , 2015
Tax Laws Amendment (Small Business Measures No. 3) Bill 2015
9
Schedule 2
--Immediate deductibility for small
1
business start-up expenses
2
3
Income Tax Assessment Act 1997
4
1 Section 40-825
5
After "5 years", insert "(or immediately in the case of some start-up
6
expenses for small businesses)".
7
2 Subsection 40-880(1)
8
After "5 years", insert ", or immediately in the case of some start-up
9
expenses for small businesses,".
10
3 After subsection 40-880(2)
11
Insert:
12
(2A) However, you can deduct the capital expenditure in the income
13
year in which you incur it if:
14
(a) the expenditure is incurred in relation to a business that is
15
proposed to be carried on; and
16
(b) the expenditure is incurred:
17
(i) in obtaining advice or services relating to the proposed
18
structure, or proposed operation of the business; or
19
(ii) in payment to an
*
Australian government agency of
20
fees, taxes or charges relating to establishing the
21
business or its operating structure; and
22
(c) you are a
*
small business entity for the income year, or both
23
of the following apply:
24
(i) you are not carrying on a
*
business in the income year;
25
(ii) you are not
*
connected with, or an
*
affiliate of, another
26
entity that carries on a business in the income year and
27
that is not a small business entity for the income year.
28
4 Subsection 328-10(1) (before table item 1)
29
Insert:
30
1A
Immediate deductibility for small
business start-up expenses
Subsection 40-880(2A)
of this Act
Schedule 2 Immediate deductibility for small business start-up expenses
10
Tax Laws Amendment (Small Business Measures No. 3) Bill 2015
No. , 2015
5 Application of amendments
1
The amendments made by this Schedule apply in relation to
2
assessments for the 2015-16 income year and later income years.
3
FBT and portable electronic devices Schedule 3
No. , 2015
Tax Laws Amendment (Small Business Measures No. 3) Bill 2015
11
Schedule 3
--FBT and portable electronic
1
devices
2
3
Fringe Benefits Tax Assessment Act 1986
4
1 Subsection 58GA(3) (definition of small business entity)
5
Repeal the definition.
6
2 Subsection 58X(4)
7
Repeal the subsection, substitute:
8
(4) However, subsection (3) does not apply if:
9
(a) the later item is a replacement for the other item; or
10
(b) the later item is a portable electronic device, and the
11
employer is a small business entity for:
12
(i) the year of income starting most recently after the start
13
of the FBT year; or
14
(ii) the year of income ending most recently after the start
15
of the FBT year.
16
Example: For paragraph (a), the later item would be a replacement for the other
17
item if the other item were lost or destroyed, or needed replacing
18
because of developments in technology.
19
3 Subsection 136(1)
20
Insert:
21
small business entity has the same meaning as in the Income Tax
22
Assessment Act 1997.
23
4 Application of amendments
24
The amendments made by this Schedule apply in relation to the
25
2016-17 FBT year and later FBT years.
26