Board of Taxation review of Small Business tax concessions

The Board of Taxation is conducting a review of Australia’s Small Business tax concessions.  This includes the Small Business CGT concessions.  The Board’s review will involve assessing the effectiveness of existing concessions and, where appropriate, recommending new concessionary approaches to the Government.

The review will include a consultation process.  In this regard, the Board has released a Consultation Guide which includes 14 consultation questions for consideration.  They are:

Core questions

1. What tax issues are of particular concern for small businesses?
2. What do you regard as the most useful or effective small business tax concessions?  Why?
3. What opportunities do you see for improving existing small business concessions?
4. Which current small business concessions are not working and / or should be removed?  Why?
5. What ideas do you have for new concessions that could help small businesses?

Detailed discussion questions

6. Do you agree with the reform principles outlined in this document?  Are there any other principles that should be considered?  Why?
7. Should certain principles be prioritised over others?  Why?
8. What are the objectives of small businesses using a particular legal structure (companies, trusts, partnership, sole trader)?
   1. What are the main objectives businesses have when they seek structuring advice (for example, reducing tax liabilities, succession planning, asset protection, etc.)?
   2. Relative to other factors, how important is reducing tax liabilities?
9. Are small business tax concessions skewed to specific parts of the small business lifecycle?  If so, should they be refocused and in what way?
10. Generally, tax concessions are broadly based and apply across different sectors of the economy.  Should there be small business tax concessions for specific sectors?  If so, why?
11. Does the small business eligibility criteria (for example, the $2m turnover threshold for small business CGT concessions) influence you to not want to grow your business?
    1. Are there alternative mechanisms to phase-out small business tax concessions as opposed to a hard cut-off?
12. What changes to the tax system would make it simpler and reduce the compliance burden for small business?
13. Should the definition of small business for tax purposes be changed?  If so, how?
14. Does technology make it easier to comply with your tax obligations and access small business concessions?  Why or why not?

The Board is intending to provide its advice to the Government in October 2018.