Staged reduction of the Company Tax Rate
It was announced in the budget this year that a staged reduction of the company tax rate will commence in the 2017-18 income year.
Small to medium businesses are set to benefit, as they will qualify earlier for the rate cut. The change involves a progressive increase to the annual aggregated turnover threshold for access to the 27.5% tax rate.
From the 2024-25 income year, there will be a further reduction each year for all companies until the corporate tax rate reaches 25% in the 2026-27 income year.
In the table below, the turnover threshold will be increased to allow more companies to access the lower corporate tax rate.
|Income year||Annual aggregated turnover threshold||Rate (%)|
|2016-17 (current year)||< $10m||27.5|
The proposed reduction in the corporate tax rate to 25% is good news for small business, however, a reduced transition period would be more beneficial to help drive growth faster.
For more information, visit your local TaxAssist Accountants office to see an accountant for a free, initial meeting.