lunes, 29 de mayo de 2017

Australia's corporate tax rate reduction scaled back

On 31 March 2017, Australia’s senate passed the relevant legislation to reduce the corporate tax rate; the approval comes almost a year after the 2016-17 federal budget announcement. The original proposal would have reduced the corporate tax rate to 25% for all companies over a 10-year period, with the reduced rates initially applied to smaller companies. However, the final amendments provide for a scaled-back outcome: a staged reduction in the rate for companies with an annual turnover of less than AUD 50 million.
The corporate tax rate currently is 28.5% for companies with turnover of less than AUD 2 million, and 30% for all other companies. The amended legislation finally agreed in the senate would make the following changes:

  • The small company tax rate would be reduced to 27.5% for the current year (2016-17).
  • The small company turnover threshold would be progressively increased for these purposes to:
  • AUD 10 million for the year ended 30 June 2017;
  • AUD 25 million for the year ended 30 June 2018; and
  • AUD 50 million for the year ended 30 June 2019.
  • The corporate tax rate would be lowered to 25% for small companies over a 10-year period. The 25% rate would be first effective for the year ended 30 June 2027.
  • The corporate tax rate would be 30% for all other companies.
  • To access the reduced rates, the company would have to carry on a business. Turnover for these purposes would be based on worldwide income, including that of affiliates and entities connected with the company (irrespective of their residence).

The bill must return to the House of Representatives when parliament resumes in May, to be passed by the house and become law.

Source: Deloitte

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