CHAPTER 3
-
SPECIALIST LIABILITY RULES
PART 3-45
-
RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS
Division 328
-
Small business entities
History
Div 328 (heading) substituted by
No 80 of 2007
, s 3 and Sch 3 item 1, applicable in relation to the 2007-08 income year and later income years. The heading formerly read:
Division 328
-
STS taxpayers
Div 328 inserted by No 78 of 2001.
Subdivision 328-C
-
What is a small business entity
History
Subdiv 328-C inserted by
No 80 of 2007
, s 3 and Sch 1 item 1, applicable in relation to the 2007-08 income year and later income years.
Former Subdiv 328-C repealed by No 41 of 2005 and inserted by No 78 of 2001.
Operative provisions
SECTION 328-110
Meaning of small business entity
General rule: based on aggregated turnover worked out as at the beginning of the current income year
328-110(1)
You are a
small business entity
for an income year (the
current year
) if:
(a)
you carry on a *business in the current year; and
(b)
one or both of the following applies:
(i)
you carried on a business in the income year (the
previous year
) before the current year and your *aggregated turnover for the previous year was less than $10 million;
(ii)
your aggregated turnover for the current year is likely to be less than $10 million.
Note 1:
The $10 million thresholds in this subsection and in subsections
(3)
and
(4)
have been increased to $50 million for certain concessions (for example, see subsection
328-285(2)
).
Note 2:
If you are or would (if the $10 million thresholds in this subsection and subsection
(3)
were increased to $50 million) be a small business entity for an income year, you may apply for permission:
(a) under section
61C
of the
Excise Act 1901
to deliver goods for home consumption (without entering them for that purpose) in respect of a calendar month or a quarter; or
(b) under section
69
of the
Customs Act 1901
to deliver like customable goods or excise-equivalent goods into home consumption (without entering them for that purpose) in respect of a calendar month or, for excise-equivalent goods, a quarter.
History
S 328-110(1) amended by No 40 of 2023, s 3 and Sch 4 item 14, by substituting notes 1 and 2 for notes 1, 2, and 3, effective 1 July 2023. Notes 1, 2, and 3 formerly read:
Note 1:
If you are a small business entity for an income year, you may apply to the Commissioner under section 61C of the
Excise Act 1901
for permission to deliver goods for home consumption (without entering them for that purpose) in respect of a calendar month.
Note 2:
If you are a small business entity for an income year, you may apply under section 69 of the
Customs Act 1901
for permission to deliver like customable goods or excise-equivalent goods into home consumption (without entering them for that purpose) in respect of a calendar month.
Note 3:
The $10 million thresholds in this subsection and in subsections (3) and (4) have been increased to $50 million for certain concessions (for example, see subsection 328-285(2)).
S 328-110(1) amended by No 92 of 2020, s 3 and Sch 3 item 29, by inserting note 3, effective 1 January 2021.
S 328-110(1) amended by No 41 of 2017, s 3 and Sch 3 item 15, by substituting
"
$10 million
"
for
"
$2 million
"
(wherever occurring) in para (b), effective 1 July 2016. For application provision, see note under s
328-357
.
S 328-110(1) amended by No 37 of 2012, s 3 and Sch 1 item 11, by inserting note 2, effective 15 April 2012.
S 328-110(1) amended by No 36 of 2012, s 3 and Sch 1 item 26, by substituting note 1 for note, effective 15 April 2012. The note formerly read:
Note:
Section
328-110
of the
Income Tax (Transitional Provisions) Act 1997
affects the operation of this subsection in relation to the 2007-08 and 2008-09 income years.
328-110(2)
You work out your *aggregated turnover for the current year for the purposes of subparagraph
(1)(b)(ii)
:
(a)
as at the first day of the current year; or
(b)
if you start to carry on a *business during the current year
-
as at the day you start to carry on the business.
Note:
Subsection
328-120(5)
provides for how to work out your annual turnover (which is relevant to working out your aggregated turnover) if you do not carry on a business for the whole of an income year.
Exception: aggregated turnover for 2 previous income years was $10 million or more
328-110(3)
However, you are not a
small business entity
for an income year (the
current year
) because of subparagraph
(1)(b)(ii)
if:
(a)
you carried on a *business in each of the 2 income years before the current year; and
(b)
your *aggregated turnover for each of those income years was $10 million or more.
Note:
Section
328-110
of the
Income Tax (Transitional Provisions) Act 1997
affects the operation of this subsection in relation to the 2007-08 and 2008-09 income years.
History
S 328-110(3) amended by No 41 of 2017, s 3 and Sch 3 item 17, by substituting
"
$10 million
"
for
"
$2 million
"
in para (b), effective 1 July 2016. For application provision, see note under s
328-357
.
Additional rule: based on aggregated turnover worked out as at the end of the current income year
328-110(4)
You are also a
small business entity
for an income year (the
current year
) if:
(a)
you carry on a *business in the current year; and
(b)
your *aggregated turnover for the current year, worked out as at the end of that year, is less than $10 million.
Note:
If you are a small business entity only because of subsection
(4)
, you cannot choose any of the following concessions:
(a) paying PAYG instalments based on GDP-adjusted notional tax: see section
45-130
in Schedule
1
to the
Taxation Administration Act 1953
;
(b) accounting for GST on a cash basis: see section
29-40
of the GST Act;
(c) making an annual apportionment of input tax credits for acquisitions and importations that are partly creditable: see section
131-5
of the GST Act;
(d) paying GST by quarterly instalments: see section
162-5
of the GST Act;
(e) applying for permission under the
Excise Act 1901
to deliver goods for home consumption (without entering them for that purpose) in respect of a calendar month or a quarter: see section
61C
of that Act;
(f) applying for permission under the
Customs Act 1901
to deliver like customable goods or excise-equivalent goods for home consumption (without entering them for that purpose) in respect of a calendar month or, for excise-equivalent goods, a quarter: see section
69
of that Act.
History
S 328-110(4) amended by No 40 of 2023, s 3 and Sch 4 items 15 and 16, by inserting
"
or a quarter
"
in para (e) of the note and
"
or, for excise-equivalent goods, a quarter
"
in para (f) of the note, effective 1 July 2023.
S 328-110(4) amended by No 41 of 2017, s 3 and Sch 3 item 18, by substituting
"
$10 million
"
for
"
$2 million
"
in para (b), effective 1 July 2016. For application provision, see note under s
328-357
.
S 328-110(4) amended by No 37 of 2012, s 3 and Sch 1 item 12, by inserting para (f) in the note, effective 15 April 2012.
S 328-110(4) amended by No 36 of 2012, s 3 and Sch 1 item 27, by inserting para (e) in the note, effective 15 April 2012.
S 328-110(4) amended by No 41 of 2011, s 3 and Sch 5 item 393, by substituting
"
in Schedule 1
"
for
"
of Schedule 1
"
in para (a) of the note, effective 27 June 2011.
Winding up a business previously carried on
328-110(5)
This Subdivision applies to you as if you carried on a *business in an income year if:
(a)
in that year you were winding up a business you previously carried on; and
(b)
you were a *small business entity for the income year in which you stopped carrying on that business.
Note 1:
Subsection
328-120(5)
provides for how to work out your annual turnover (which is relevant to working out your aggregated turnover) if you do not carry on a business for the whole of an income year.
Note 2:
A special rule applies if you were an STS taxpayer under this Division (as in force immediately before the commencement of this section) in the income year in which you stopped carrying on the business: see section
328-111
of the
Income Tax (Transitional Provisions) Act 1997
.
Partners in a partnership
328-110(6)
A person who is a partner in a partnership in an income year is not, in his or her capacity as a partner, a
small business entity
for the income year.
History
S 328-110(6) inserted by No 42 of 2009, s 3 and Sch 2 item 39, applicable to assessments for the 2007-08 income year and later income years. For transitional provision relating to choice, see note under s
152-10(1)
.
History
S 328-110 inserted by
No 80 of 2007
, s 3 and Sch 1 item 1, applicable in relation to the 2007-08 income year and later income years.
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