25% Entrepeneurs Tax Offset - have I screwed myself...?

[Apocalypse]

I am PAYG for about half my taxable income and self-employed/contractor for the other half. My turnover for this half will be under the 50K threshold, and the expenses component is pretty small, hence the 'profit' will be most of the turnover. Last year this would've been all fine and dandy, I would be entitled to the 25% offset, but this year I switched to a sole-director company, and now I'm not so sure.

Since the income the company derives is through my personal exertion I am required to channel all profit to me personally...either via a wage, or dividend. I have elected to do this as a wage, so as to make my company profit zero.

http://law.ato.gov.au/pdf/20050041.pdf

This is the best info I can find at the moment and I reckon I may have selected the option that negates the 25% discount...

 

[Apocalypse]

I have also found this: http://www.ato.gov.au/businesses/content.asp?doc=/content/67700.htm

From this it says:

The entrepreneurs’ tax offset (ETO) is a new measure that allows a tax offset (reduction) of up to 25% of the income tax attributable to the business income of a business in the simplified tax system (STS) with an annual group turnover of less than $75,000.

So I have a business (run under a sole director company) that is PSI in nature. After a small amount of expenses are deducted I am required to distribute all of the business profit to my personal income. This is to satisfy Part IVA anti-tax avoidance measures. So technically the wage/salary/directors fees/whatever that I give myself each quarter represents the business's income...does that sound a viable argument?

Or should I write to the ATO to seek clarification? Can I write to them and say sorry I stuffed up I meant to issue it as a dividend rather than income?

When do Tax Packs come out - how it is presented in there may dictate what I do before the end of financial year?

There's just not a lot of information available...

 

[Apocalypse]

Preliminary reading of the TaxPack 2006 supplement suggests I have indeed screwed myself. I'll wait to see if there is any mention in the company tax return instructions, but in the supplement it only mentions ETO applying to income from 3 sources: sole trader, partnership, or trust distribution.

Yet in some of the examples in the very limited available documents, it said company profits were also eligible...

 

[ggumpshots]

If you ring the tax office they have some whizz kids who know their stuff.
Dont speak to a grunt . They are useless and can really mislead you big time.

Throw in some jargon to bamboozle the grunt but make sure you speak to middle managmemt at least.

Ring again the next day for the same information but you will almost certainly get a different person. If it is the same information then you likely have the correct information. You can then request a private ruling so that the information you have is correct for you.

Hopefully you will get expertise here, but it wouldnt hurt to have that confirmed either