Tax for entrepreneurs: What you need to know about the entrepreneurs tax offset (ETO)
August 24, 2018
The federal government provides a number of tax incentives for entrepreneurs.
Once upon a time, these included the entrepreneurs tax offset (ETO), but search for information on the ETO these days and you’ll likely turn up a bunch of out of date pages on the ATO website. It can all be a bit confusing.
Despite being well remembered, the entrepreneurs tax offset was abolished from the 2012-13 financial year.
It provided a tax offset equal to 25% of the income tax liability attributable to the income of the small business entity.
The full offset was available to Small Business Entities (SBE) with a turnover of less than $50,000 and reduced to zero when turnover reached $75,000.
It was available to individuals, companies, partnerships and trusts.
The good news is that the gap left by the ETO was filled, at least partially, by the small business income tax offset.
The even better news is that this small business income tax offset is more widely available with a wider group of taxpayers now being able to access the concession – not just entrepreneurs.
This offset can reduce tax payable by up to $1,000 each year and is available to small businesses with an annual turnover of up to $5 million.
However, it is only available to unincorporated businesses such as sole traders, partnerships and trusts.
The entrepreneurs tax offset is a government incentive to help small businesses grow. The tax offset can equal up to 25% of the income tax liability for eligible business entities.
Need help identifying tax incentives?
Small businesses, particularly those backed by some entrepreneurial flare, are an important component of our economy.
It’s easy, however, to get bogged down in the day-to-day demands of running a business and to miss the big picture.
LDB can help your small business identify all the tax incentives it is eligible for.
We can also advise on the full range of tax and financial issues that all small businesses encounter.
We can help you find the peace of mind that comes from knowing you are doing all you can to ensure the success of your small business.
To find out more, call us on (03) 9875 2900, or fill in the contact form below.