Lower company tax rate for small business

Effective in the 2017-18 income tax year, base rate entities (AKA small businesses) are eligible for a lower company tax rate of 27.5%.

CONDITIONS

  • Company has a turnover is less than $25 million
  • Passive income (for example, dividends, interest or rent) must be no greater than 80%. In other words at least 20% of its turnover must be from operating a business.

NEXT STEPS

We will generally apply the most effective method when preparing your end of year tax returns or during tax planning activities.

It will have implications to dividend franking due to the lower tax rate.

Speak to our business specialists today to understand how it may apply to your business.

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