If your business buys or sells stock, you may need to do a stocktake for tax purposes.

All businesses are required to do a stocktake as close as possible to the end of each income year. A stocktake involves counting and checking all products, goods or inventory in your business to make sure your records are accurate and correct. A stocktake lets you work out the value of your trading stock at the end of financial year for business or tax purposes.

Trading stock is anything your business acquires, produces or manufactures, for the purposes of manufacturing, selling or exchanging.


From 1 July 2021, you may be eligible to access the simplified trading stock rules if:

  • You are a small business (aggregated turnover of less than $10 million); or
  • You would be a small business except your aggregated turnover is $10 million or more but less than $50 million.


  • You estimate that the value of your trading stock changed by less than $5,000 in the year.

Summary of concessional treatment

Under the simplified trading stock rules, you don’t have to:

  • Conduct a formal stocktake; and
  • Account for changes in your trading stock’s value.

Instead, you can make a reasonable estimate of the:

  • Quantity of stock on hand; and
  • Value of each item of stock.

You must:

  • undertake your estimate in good faith following a rational process; and
  • be able to explain and prove your process to the ATO, if requested.