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
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.

Date published 19 Dec 2016

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.