Document ID: chunk:federal_register_of_legislation:C2010C00584:clause:1_5:p1
Version: federal_register_of_legislation:C2010C00584
Segment Type: clause
Provision Reference: sch 1 cl 5 (pt 1/4)
Character Range: 13075–15763

5  After Subdivision 61‑I
Insert:

Subdivision 61‑J—25% entrepreneurs' tax offset

Guide to Subdivision 61‑J

61‑500  What this Subdivision is about

      This Subdivision provides a 25% tax offset on your income tax liability related to the business income of a business in the simplified tax system with annual group turnover of less than $75,000.
      Your entitlement to the offset varies depending on what kind of entity you are. The amount of your offset varies depending on whether the annual group turnover is $50,000 or less or is more than $50,000.
      You may be entitled to more than 1 tax offset. For example, if you are an individual STS taxpayer running your own business, you may be entitled to a tax offset under section 61‑505. If you are also a beneficiary of a trust that is an STS taxpayer, you may be entitled to a tax offset under section 61‑520.

Table of sections

Operative provisions

61‑505 25% entrepreneurs' tax offset: individual or company
61‑510 25% entrepreneurs' tax offset: partner in a partnership
61‑515 25% entrepreneurs' tax offset: trustee of a trust
61‑520 25% entrepreneurs' tax offset: beneficiary of a trust
61‑525 Meaning of net STS income and STS annual turnover

Operative provisions

61‑505  25% entrepreneurs' tax offset: individual or company

Entitlement

 (1) You are entitled to a *tax offset for an income year if:
 (a) you are an individual or a company; and
 (b) you are an *STS taxpayer for the year; and
 (c) your *STS group turnover for the year is less than $75,000; and
 (d) you have *net STS income for the year.

Amount

 (2) The amount of your *tax offset is worked out in this way:

      Method statement
           Step 1. Work out your taxable income for the income year.
           Step 2. Work out 25% of your basic income tax liability for the year (as worked out in step 2 of the method statement in subsection 4‑10(3)).
           Step 3. Work out the percentage (the STS percentage) using the formula:

            If that percentage is more than 100%, the STS percentage is 100%.
           Step 4. If your *STS group turnover for the year is $50,000 or less, multiply the amount at step 2 by the STS percentage: the result is the amount of your *tax offset.
           Step 5. If your *STS group turnover for the year is more than $50,000, work out the fraction (the STS phase‑out fraction) using the formula:

            The amount of your *tax offset is worked out using the formula:

Example: A company runs a local sports business. The company is an STS taxpayer for the year. The company's STS group turnover for the year is $50,000, the company's net STS income for the year is $40,000 and the