Australia's Improved Tax Regime For Small Firms Goes Into Effect

by Mary Swire, Tax-News.com, Hong Kong

06 July 2007

Changes to Australia's GST registration thresholds and greater access to a range of tax concessions from July 1, 2007, have made it easier for small firms to comply with their tax obligations, according to Minister for Revenue and Assistant Treasurer, Peter Dutton.

Most small businesses in Australia with an annual turnover of less than A$2 million will benefit from the changes, Dutton has said.

“Eligible businesses will now be able to reduce their compliance costs by taking advantage of a range of concessions for GST, income tax, capital gains, pay as you go instalments and fringe benefits,” the Minister stated.

Businesses whose annual turnover is greater than A$2 million may still be eligible for capital gains and fringe benefits concessions under the existing rules.

Minister for Small Business and Tourism, Fran Bailey, stated that the change to the threshold means more businesses will be entitled to access concessions which will reduce their compliance costs.

“Business will also benefit from the important changes for registering, reporting and paying their GST.”

“The threshold for registering for GST has increased, so businesses will only be required to register for GST if their turnover is A$75,000 or over,” Bailey said.

The threshold for non-profit organisations has increased to A$150,000.

Businesses with a turnover under the new thresholds, or who voluntarily register for GST have the option to: continue with their current arrangements; choose to report and pay GST annually; or cancel their GST registration.

Businesses no longer need a tax invoice to claim GST credits for purchases under A$82.50 (including GST).

The Tax Office will also be able to offer simplified accounting methods to all taxpayers with an annual turnover of less than A$2 million that make both taxable and GST free supplies or purchases.

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