Staged reduction of the Company Tax Rate

December 2016

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
2017-18 < $25m 27.5
2018-19 < $50m 27.5
2019-20 < $100m 27.5
2020-21 < $250m 27.5
2021-22 < $500m 27.5
2022-23 < $1bn 27.5
2023-24 None 27.5
2024-25 None 27.0
2025-26 None 26.0
2026-27 None 25.0

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.