Small Business Tax
The small business tax system was introduced in the 2014/2015 financial year as a simplified system for the small business taxpayers. Certain criteria must be met in order for a taxpayer to be in the small business tax system.
Who is under small business tax system?
If E28093
You are a sole trader;
Your Annual turnover is less than $100,000
You are not a professional service provider and
You have not applied to remain in the profit based tax system,
then you are in the Small Business Tax System.
Note: professional service providers include lawyers, health professionals, financial institutions, accountants, architects, etc.
A new small business tax is for those individuals in business whose gross annual turnover (sales) is below $100,000 TOP. This system came into force on 1st August (for the year beginning 1st July 2014).
Tax on Turnover
Small Business Tax is imposed on turnover= s as opposed to tax imposed on E28098 profit E28099 in the profit based income tax system.In other words, there are no deductions allowed.
Small Business Tax Rates
The tax is based on gross annual turnover (sales) on a cash basis split into 4 rates:
Annual Gross Turnover
Small Business Tax Payable
$0 -$10,000
Lump sum of $100
$10,001 - $30,000
Lump sum of $250
$30,001- $50,000
Lump sum of $500
$50,001- $100,000
2% of your gross annual turnover
Forms and Due Dates
There are four forms:
Small Business Tax return E28093 Form 12
Refund of Small Business Tax E28093 Form 13
Application for the normal income tax to apply & not the Small Business Tax - Form 14
Application for the Small Business Tax to apply to an individual w= ho has previously been granted approval for the normal income tax to apply E28093 Form 15
If your annual gross turnover is more than $50,000, a quarterly Small Business Tax return must be lodged with 28 days of end of the quarter together with payment unless an extension of time has been granted. For those whose annual gross turnover is less than $50,000, the Small Business Tax annual return is due by the 31st October each year together with any tax due.
Record keeping requirements:
The records you are required to be kept are:
Cash book recording daily sales, including credit sales.
Your employee E28099s salary and wages register (if applicable).
These records must be kept in the:
English or Tongan languages
Kingdom of Tonga for 5 years after the end of the Small Business Tax Period.
Please refer to Record Keeping for further details.
