NSW small business stamp duty exemption
What is the NSW Small Business Stamp Duty Exemption?
One of the changes announced in the NSW government 2017 budget was the introduction of legislation to remove the application of stamp duty to particular insurance products, with the goal to make insurance more affordable for small businesses.
As of the 1st of January 2018, small businesses (as defined below) were no longer required to pay stamp duty on certain types of insurances upon declaring their business as being eligble for the stamp duty exemption.
What is a small business according to the NSW government?
Revenue NSW classifies a small business as an individual partnership, company or trust that is performing as a business and has an aggregated turnover of less than $2 million.
An aggregated turnover is defined as your Australia-wide annual turnover plus the annual turnovers of any businesses that are your affiliates or are connected with you1.
Which Business Insurance products does the exemption apply to?
How do I get the exemption?
The NSW Government requires eligible small businesses to complete an exemption form declaring that they meet the exemption criteria prior to taking out business insurance. The process typically involves the small business purchasing their business insurance policy and then applying for a refund on the stamp duty amount.
At BizCover we like to keep things simple. When you purchase your eligible business insurance policy with us, we will apply the exemption once you make your declaration online. This means the exemption is applied automatically off the purchase price, saving you time on having to go through the refund process.
Frequently Asked Questions
You can receive more information about the NSW small business stamp duty exemption on the NSW Government Revenue website.
Your small business must meet the eligibility requirements established by NSW Government Revenue. To be considered a small business for the current year, you must be an individual, partnership, company or trust that is performing as a business and has an aggregated turnover of less than $2 million.
An aggregated turnover is defined as your Australia-wide annual turnover plus the annual turnovers of any businesses that are your affiliates or are connected with you2.
2 Revenue NSW, https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/insurance-duty/small-business-exemption accessed February 2020
The NSW Government charges a tax on certain insurance purchases, and the insurer collects the stamp duty charged when your policy renews or your first premium is paid. The stamp duty amount is determined by the type of insurance product and as at February 2020ranges between 2.5%-9% of the insurance premium. To find out more about the NSW Insurance Stamp duty please visit NSW Government Revenue website.
* The information contained in this article is general only and should not be relied upon as advice.