What is considered an "offset" in the ATO Green Book?

An "offset" in the context of the ATO Green Book refers to a deduction from a tax liability, which serves to reduce the total amount owed in taxes. This concept is important in tax administration because offsets can lower the amount of taxable income or create an overall reduction in tax obligations, providing relief to individuals or entities. For instance, various offsets in the tax system might take into account certain eligible expenses or credits that directly subtract from what one owes, making the tax burden more manageable. Understanding offsets is crucial for effective tax planning and compliance, as they can lead to significant tax savings.