From 1 July 2016, the government will increase the current 5% tax discount (referred to as the SBITO) to 8%. The discount in tax payable is currently available to an individual in receipt of income from an unincorporated small business entity (basically an entity with an aggregated turnover of less than $2 million) and applies to the income tax payable on the business income received from such an entity.
The turnover threshold for access to the unincorporated small business income tax offset for individuals will increase from $2m to $5m and the discount will remain constant at 8% for eight years and will then increase to 10% in 2024/25, 13% in 2025/26 and 16% from 2026/27.
The current tax discount cap of $1,000 per individual for each income year will remain unchanged.
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