Tax reform for small businesses
The Federal Government has announced a package of tax law amendments aimed at improving the cash flow and reducing compliance costs for small businesses by simplifying the depreciation rules.
The Federal Government has released a public consultation exposure draft legislation and explanatory materials for the amendments.
The key points of the small business tax reform are:
- Immediately write-off assets valued at under $6,500 (up from $1,000 presently), such as photocopiers, laptops, fridges and desks
- Immediately write-off up to $5,000 for motor vehicles acquired from the 2012-13 income year, with the remainder to be written-off at a rate of 15 per cent in the first year and 30 per cent in following years
- Write-off of other assets in a single depreciation pool at a rate of 30 per cent (15 per cent in the first year).
"These measures will have a significant impact on improving cash flow for Australia's 2.7 million small businesses. The total assistance to small business from this package in 2013-14 will be over $1 billion,” Assistant Treasurer Bill Shorten said.
The exposure draft legislation and explanatory memorandum is available on the Treasury website . The consultation period ends Wednesday 28 September 2011.