From 1 January 2018, NSW small businesses will be exempt from paying stamp duty on certain types of insurance.
What is the NSW Small Business Exemption
What is a Small Business?
Revenue NSW has stated that:
“You are a small business if you are an individual, partnership, company or trust that is carrying on a business, and the business has an aggregated turnover of less than $2 million.
Aggregated turnover is your annual turnover plus the annual turnovers of any business entities that are your affiliates or are connected with you.”
What is a the definition of ‘Carrying on a Business’?
The ATO has stated that:
“Broadly, the ATO considers that if a company is established and maintained to make a profit for shareholders and its assets are invested in activities intended to make a profit, it is likely that it will be carrying on a business in a general sense.
The draft ruling states that a company is unlikely to be carrying on a business if it has no prospect of making a profit and its activities lack a commercial character.”
Which Insurance types will the Exemption apply to?
This exemption can be applied for NSW small businesses with one the following insurance types:
- Commercial Vehicle insurance
- Commercial Aviation insurance
- Occupational Indemnity insurance (Professional Indemnity)
- Product and Public Liability insurance
- Crop & Livestock insurance
- This declaration covers all policies issued to you during the financial year ended 30 June 2024.
- If you are uncertain whether you classify as a small business, please speak to your financial adviser.
- Your Insurer will place reliance on your declaration in charging the applicable insurance duty.
- False declarations may result in penalties up to of $11,000 by Revenue NSW plus the insurance duty not paid and penal interest on that balance.
- Revenue NSW may also be able to clarify your queries relating to the law and your obligations.
- If you are a not for profit organisation already entitled to a NSW Stamp Duty Exemption, your premium is already exempt and the NSW Stamp Duty Exemption for Small Business is not relevant.
Instructions for Applying for an Exemption
To receive the exemption, please complete this declaration declaring that you are a small business.