There are changes to company tax rates. While the full company tax rate is 30%, your company may be eligible for a lower company rate.
If you are a ‘base rate entity’, your company tax rate is:
- 27.5% from the 2017–18 to 2019–20 income years
- 26% for the 2020–21 income year
- 25% from the 2021–22 income year onwards.
For your company to be a ‘base rate entity’, it needs to meet the following eligibility criteria:
- aggregated turnover of less than $25 million for the 2017–18 income year or $50 million from the 2018–19 income year onwards, and
- if your company earns passive income, it cannot exceed 80% of the company’s assessable income, which can include:
- corporate distributions and franking credits on these distributions
- royalties and rent
- interest income
- gains on qualifying securities
- a net capital gain.
There are different rules for the 2015–16 and 2016–17 income years.