Fuel Tax Credit and CGT SBE threshold

Q&A Tax

Question :

Would the Fuel Tax Credits a client receives count towards their turnover when trying to pass the $2
million small business CGT tests?

Or are we able to offset the credits to the fuel expense and therefore not include it as turnover?


Answer :

Annual turnover is defined in section 328-120 as the total ordinary income of the entity derived during
the year in the ordinary course of carrying on a business.

If the fuel tax credits are directly related to the ordinary business activities of the entity then they
should be classified as ordinary income and be included in the annual turnover calculation.

The fuel expenses should not be offset against the fuel tax credits when determining the turnover of
the entity.

Refer to ATO ID 2007/71 for your reference.

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