Small business corporate tax rates Bill is now law
04/12/2018 by Spry Roughley December 18/January 19 ReportThis implements the Government's proposal to accelerate the reduction of the corporate tax rate for corporate tax entities that are base rate entities (ie corporate tax entities that derive no more than 80% of their income in passive forms and have an aggregated turnover of less than $50 million). The corporate tax rate for base rate entities will now reduce from 27.5% to 26% in 2020–2021, before being cut to 25% for 2021–2022 and later income years. This means eligible corporate taxpayers will have a tax rate of 25% in 2021–2022, rather than from 2026–2027 as under the previous law.
The new law also increases the small business income tax offset rate to 13% of an eligible individual's (ie unincorporated business's) basic income tax liability that relates to their total net small business income for 2020–2021. This offset rate will then increase to 16% for 2021–2022 and later income years.
The maximum amount of the small business income tax offset does not change – it continues to be capped at $1,000 per individual per year.
Source: https://www.legislation.gov.au/Details/C2018A00134.