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Obviously – making a commitment like the 30% Small Business and General Business Tax Break has a significant impact on the Federal Government’s bottom line.

But how much of an impact will it have?

In the explanatory memorandum for the Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009, the Government clearly articulates the impact it thinks the bill will have over the next couple of years.

Financial Impact:  The amendments are estimated to have a total cost to Budget of $3.8 billion for 2009-10 to 2011-12

Further to this “big number” – they do provide a breakdown of the impact to tax revenue between now and the 2011-12 year

2007-08:  Nil

2008-09: Nil

2009-10: -$1,440m

2010-11: -$1,800m

2011-12: -$515m

It should be noted that this isn’t just the cost of the 30% Investment tax break that will be in place between 13 December 2008 and 30 June 2009, but also the reduced 10% Investment tax break that will be in play from 1 July 2009 through until 31 December 2009.

If you have read anything about the Federal Government’s proposed 30% investment tax break – I am sure you would know that there are two “tiers” under which your business could qualify for the tax break.  Depending on the size of your business, this could have a significant impact on what your business could claim under the tax break.

To find out if your business qualifies for the 30% tax break, lets take a look at what has been said in parliament.  As mentioned by the Treasurer – Wayne Swan – when he introduced the Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009 into the House of Representatives…

Small business entities need to invest a minimum of $1,000 to qualify for the tax break.  All other businesses need to invest a minimum of $10,000

Which begs the next question… what is the definition of “Small Business”.  The good news is that this is defined in the Explanatory Memorandum of the bill.

In section 1.76…

A taxpayer is a small business entity for an income year, rather than at a point in time.  Section 328-110 provides that a taxpayer is a small business entity for the current income year if they:

• carried on a business during the previous year and their aggregated turnover for that year was less than $2 million; and
• expect their aggregated turnover to be less than $2 million again in the current income year

To read more about the difference between a small business and a general business under the Small Business and General Business Tax Break – make sure you read through the Explanatory Memorandum

On 19 March 2009, the Federal Government introduced the Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009 into the House of Representatives.

The Treasurer – Wayne Swan – commenced the second reading of the bill.  As recorded in Hansard…

I move:  That this bill be now read a second time.  This bill introduces the small business and general business tax break – a key part of the government’s Nation Building and Jobs Plan. 

The $3.8 billion tax break will help boost business investment, bolster economic activity and support Australian jobs.

The tax break is targeted towards encouraging and sustaining business investment in the face of a global recession

You can read Mr Swan’s entire speech from the second reading of the bill at the ParlInfo site.

Whilst the Federal Government announced the 30% Investment Tax Break for Small Businesses and General Businesses back on 3 February 2009, the legislation that supports that announcement has yet to pass through the Australian House of Representatives and the Senate to become law.

The fastest way to find out the current status of the Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009 is to visit the ParlInfo site.  You can not only find out the current status of the bill before parliament, but you can also read any documentation regarding its journey towards becoming law.

The current status of the bill (as at 1 May 2009) is that it is currently before the House of Representatives (the originating house).  The House of Reps do not sit again until 12 May 2009 – so make sure you check back regularly then – or simply subscribe to our email updates which will let you know once the bill has been passed by both the House of Representatives and the Senate.

The Australian Treasury released the exposure draft of the proposed 30% Investment Tax Break legislation on 23 February 2009.

The 12 page document outlines the specific changes to the Income Tax Assessment Act 1997, including the addition of Division 41.

The object of this Division is to provide a temporary business tax break for Australian businesses with a view to encouraging business investment and economic activity

You can download the exposure draft of the legislation from the Treasury.gov.au website

Hi there, and welcome to 30percent.com.au

As many Australian business owners would know, on the 3rd of February 2009, the Prime Minister of Australia - Kevin Rudd, announced a raft of measures to stimulate Australia’s economy. 

One of the measures that made up the stimulus package that Kevin Rudd announced on behalf of the federal government was the Small Business and General Business Tax break.

To quote the Prime Minister’s media release…

To support jobs and Australian businesses – especially small businesses – the Government will fund an investment tax break for all Australian businesses.  This temporary business tax break will help Australian businesses boost business investment, bolster economic activity and support Australian jobs.

This website – 30percent.com.au – is dedicated to covering news, resources and promotions focused on the 30% Investment Tax Break.

Want to keep up to date on the 30% Investment Tax Break?

Make sure you subscribe to our email updates – each week between now and the 30th of June (when the 30 Percent Tax Break expires) we will send regular updates to ensure you have the right information to make the right decisions – and make the most out of this $2.7 billion tax break the Government is giving Australian businesses.