The Government is assisting small business to help reduce compliance costs associated with a range of tax measures, Minister for Revenue and Assistant Treasurer, Senator Helen Coonan, said today.
“Many of the measures were introduced as part of the 2004-05 Budget and are testament to the Government’s commitment to helping small business get on with the job,” Senator Coonan said.
The measures include:
- Small businesses and non-profit organisations that voluntarily register for GST will be allowed to report and pay GST on an annual rather than quarterly or monthly basis.
- Small businesses with an annual turnover of $2 million or less will be allowed to apply private use apportionment for GST purposes on an annual basis, rather than each time they prepare their Business Activity Statements.
- The GST instalment option will be simplified so that no annual re-election will be required for eligible entities wishing to continue to pay GST by instalments.
- Optional roll-over relief will be extended in relation to the Simplified Tax System depreciating asset pools to ensure consistency with taxpayers operating under the uniform capital allowances regime.
- Small business will get a carve-out from the debt/equity tax rules for related party ‘at-call’ loans to help reduce compliance costs and red tape. This carve out will reduce unnecessary compliance costs for a large number of small businesses using at call loans by generally removing the need to put formal loan agreements in place or maintain non-share capital accounts.
- The Wine Equalisation Tax (WET) rebate will apply from 1 October 2004. The effect of this decision is to exempt $1 million of each producer’s domestic wholesale wine sales from the WET on an annual basis. The changes will reduce compliance costs, particularly for small wine producers who will no longer need to access both an Australian Government rebate and state subsidy scheme.
- Greater flexibility will be provided to private companies by allowing franked distributions to be paid in a company’s first profitable year where the company anticipates franking credits based on a reasonable estimate of the expected tax liability for that income year.
- A number of Fringe Benefits Tax exemptions will be extended to ensure they remain relevant and accessible to small business.Small businesses providingremote area housing will no longer be required to establish that such employer-provided housingis 'customary'in their industryin order to receive an FBT exemption.
- The existing FBT exemption for work related items such as laptops will be extended to include portable printers and personal digital assistants. In addition, the existing FBT exemptions for relocation costs will also be extended to cover the engagement of relocation consultants.
- Flexibility will be increased and uncertainty removed, in relation Family Trust elections. The initiative will allow, subject to certain conditions, these elections to be made at any time in relation to an earlier income year.
- The time-frame will be extended for shareholders of private companies to repay or put loans on a commercial footing. This will ease compliance costs without compromising the integrity of the non-commercial loan rules.
- Certainty will be increased by allowing taxpayers who become ineligible to pay annual PAYG instalments during an income year to commence paying quarterly instalments in the first quarter of the following income year.
The Australian Taxation Office has also announced a Small Business Debt Assistance initiative to help small business and individual taxpayers repay their current outstanding tax debts.
“This will benefit around 500,000 small businesses and individuals and help them to manage their outstanding tax debts,” Senator Coonan said.
“Small business will benefit from this suite of measures which will collectively bring wide ranging improvements to the tax system and alleviate compliance concerns for small business.”