Increased amendment period for small businesses

The Federal Treasurer Jim Chalmers handed down the 2023 Federal Budget on 9 May 2023, as part of the budget it was announced that from 1 July 2025, the 2 year amendment period for small businesses’ income tax returns will be extended to 4 years.

Small business entity

As per s 328-110 of ITAA 1997, A small business entity is defined as taxpayer who/that:

  • carries on a business in the income year; and
  • one or both of the following applies:
  • the taxpayer carried on a business in the previous income year and the aggregated turnover for that year was less than $10 million; and/or
  • the taxpayer’s aggregated turnover for the current year is likely to be less than $10 million.

Current Amendment period

The period during which the Commissioner may amend an assessment for small to medium business taxpayers is 2 years. The amendment period applies from the day on which the Commissioner gives notice of the assessment to the taxpayer (s 170(1) ITAA 1997).

Proposed amendment period

As part of the 2023–24 Federal Budget, the government has announced that from 1 July 2025, the 2 year amendment period for small businesses’ income tax returns will be extended to 4 years.

This measure aims to reduce the burden on small businesses that wish to amend their income tax returns but don’t have enough time on hand to do so.

Contact us

Please note this proposed measure will require parliamentary approval before it comes into effect, in the interim, please do not hesitate to contact our office should you have any queries in this regard.

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