- An individual, partnership, company or trust is a small business if it:
- Operates a business for all or part of the income year; and
- Has less than $2 million aggregated turnover.
The aggregated turnover includes the annual business turnover, excluding passive income, of:
- The taxpayer;
- The taxpayer’s connected entities; and
- The taxpayer’s affiliates.
An entity is connected with the taxpayer if either:
- The taxpayer controls or is controlled by that entity; or
- Both the taxpayer and that entity are controlled by the same third party.
An affiliate is an entity who acts or could reasonably be expected to act in accordance with the taxpayer’s directions or in concert with the taxpayer in relation to their business affairs.
The $2 million aggregated turnover test is met if:
- The taxpayers's aggregated turnover was less than $2 million in the previous income year; or
- The taxpayers's aggregated turnover in one of the two previous income years was less than $2 million, and their current year aggregated turnover is likely to be less than $2 million as reasonably estimated at the first day of the current income year; or
- The taxpayers's actual aggregated turnover was less than $2 million as worked out at the end of the current income year.
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