Australia offers several tax incentives to support small businesses. These incentives are designed to reduce the financial burden on small businesses, encourage investment, and foster innovation. Here’s a look at some of the key small business tax incentives available in right now.

Instant Asset Write-Off

Small businesses, with an aggregated turnover of less than $10 million, can immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2025.

The $20,000 threshold applies on a per asset basis, so small businesses can instantly write off multiple assets.

Assets valued at $20,000 or more can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year after that. In addition, pool balances under $20,000 at the end of 2023–24 income year can be written off.

Small Business Tax Offset

The small business income tax offset (also known as the unincorporated small business tax discount) can reduce the tax you pay by up to $1,000 each year.

The offset is worked out on the proportion of tax payable on your business income.

Simplified Depreciation Rules

Small businesses can benefit from simplified depreciation rules that allow them to write off the cost of assets quicker than large businesses. These rules allow small businesses to pool certain depreciable assets together and claim one deduction for the total pool, making the process of claiming depreciation easier.

The Small Business CGT Concessions

The Capital Gains Tax (CGT) concessions available to small businesses can help reduce the tax payable when selling assets. Small businesses may be eligible for concessions such as the 15-year exemption, retirement exemption, or rollover relief on capital gains from the sale of business assets, provided certain conditions are met.

Superannuation Contributions for Employees

Small businesses can benefit from superannuation incentives, including the Superannuation Guarantee (SG) payments, which are a tax-deductible expense. Additionally, the Small Business Superannuation Clearing House helps streamline superannuation payments for employers.

At Sixth Sense Tax, we can assist small businesses navigate these incentives to maximize their tax benefits and grow successfully.