As a small business owner in Australia, it is important to have a good understanding of the tax system and your obligations. In 2023, there are several changes and updates to the tax laws that may affect your business. This article will provide you with a comprehensive overview of the key tax changes for small businesses in 2023. Please note; the below information is only for general knowledge purposes and you should check with ATO or your accountant for your business-specific requirements or needs.
- Instant Asset Write-Off
The instant asset write-off scheme has been extended for another year and will now be available until 30 June 2023. Under this scheme, small businesses with a turnover of less than $5 billion can claim a tax deduction for assets purchased and first used, or installed ready for use, in the 2023 financial year. The write-off limit has increased from $150,000 to $150,000 plus the cost of any improvements made to the asset.
- Tax Rates
In 2023, the company tax rate remains unchanged at 25% for companies with a turnover of less than $50 million. For companies with a turnover of $50 million or more, the company tax rate is 30%.
- Single Touch Payroll (STP)
Small businesses with 20 or more employees are required to use Single Touch Payroll (STP) from 1 July 2023. STP is an electronic reporting system that allows businesses to report salary and wage information, as well as pay-as-you-go (PAYG) withholding amounts, to the Australian Tax Office (ATO) directly from their payroll system.
- Taxable Payments Reporting System (TPRS)
The Taxable Payments Reporting System (TPRS) applies to businesses that provide building and construction services. The TPRS requires businesses to report payments made to contractors to the ATO. The TPRS reporting obligations will be extended to include businesses in the cleaning and courier industries from 1 July 2023.
- Fuel Tax Credits
Fuel tax credits are available to businesses that use fuel in their vehicles, machinery, or equipment for work purposes. The fuel tax credit rates will increase in 2023, so it is important to regularly check the ATO website to ensure you are claiming the correct amount.
In conclusion, these are some of the key tax changes that may affect small businesses in 2023. As a small business owner, it is essential to stay informed and up-to-date with the latest tax laws and requirements to ensure compliance and avoid any penalties or fines. If you need assistance, it is recommended that you seek the advice of a tax professional or accountant.
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