Reductions In The Corporate Tax Rate
As part of its 10 Year Enterprise Tax Plan, the Government announced a program to cut the company tax rate to 25% over the next 10 years. This measure will commence from July 1, 2016 when the government will cut the company tax rate to 27.5% for small companies with an annual aggregated turnover of less than $10 million.
According to the budget papers, this will deliver a lower tax rate for around 870,000 companies that employ more than 3.4 million workers.
The turnover threshold will then be progressively increased and ultimately all companies with a turnover of $1 billion or less should have a flat tax rate of 27.5% by the 2023/24 income year. In the 2024/25 income year, the company tax rate will be reduced to 27% and then be reduced progressively by 1 percentage point each year until it reaches 25% in the 2026/27 income year.
These measures introduce the first significant company tax cuts in over a decade, with the last one occurring in 2001 under the Howard Government.
Franking credits will be distributed in line with the rate of tax paid by the company.
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Other articles in this edition:
- 2016 Federal Budget Highlights
- Personal Taxation
- Access To Small Business Tax Concessions
- Increasing The Small Business Income Tax Offset (SBITO)
- Superannuation Changes
- Medicare Levy Low Income Thresholds for 2015/16
- Applying GST To Low Value Imported Goods
- Amendments To Division 7A
- Youth Employment Package - Bonuses For Hiring Young People & Interns
- SuperStream Deadline - 30th June
- Claiming Work Related Travel Expenses
- What Are The Acres Of Diamonds In Your Business?
- Starting A Business - Do The Numbers Stack Up?
IMPORTANT DISCLAIMER:This newsletter is issued as a guide to clients and for their private information. This newsletter does not constitute advice. Clients should not act solely on the basis of the material contained in this newsletter. Items herein are general comments only and do not convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of these areas.