The Simplified Tax System (STS) is an alternative method of determining taxable income for eligible small businesses with straightforward financial affairs.

To be eligible for the STS in an income year you must:

• be carrying on a business in that year and
• have an STS average turnover for that year of less that $1 million
• hold less than $3 million in total of adjustable values of depreciating assets.

The benefits of the STS can include:

• an immediate write-off for assets costing less that $1 000
• more generous, simpler depreciation for many assets
• not doing an annual stocktake
• an immediate deduction for business expenses paid up to 12 months in advance.

Entrepreneurs' Tax Discount
If you are in the STS, and have an annual turnover of $50 000 or less, then you will be eligible for the Entrepreneurs' Tax Discount of 25% on your income tax liability in respect of your business income. The Discount phases out when turnover is greater than $50 000 and ceases at STS turnover of $75 000.