Company Tax Rates Change

There are a range of companies who are eligible for lower tax rates. You can be assured that we will always act in your best interests when applying tax law to your company tax return. Base rate entities like companies, public trading trusts, and corporate unit trusts are eligible to pay lower company tax rates.

About Base Rate Entities

  • A base rate entity has less than $50 million aggregated turnover, with 80% or less of their assessable income being passive income. This law supersedes the requisite that you be carrying on a business.
  • Income types included in base rate passive income include royalties, corporate distributions, interest income, rent, and more.
  • In the 2020 financial year base rate entities enjoyed a tax reduction from 30% to 27.5%. In this current 2021 financial year the rate reduces even further to 26%. From the year 2022 it will fall to 25%.
  • The full 30% company tax rate applies to companies that don’t qualify as a base rate entity.

Your Business May Qualify For Lower Rates

Tax time is just around the corner so there’s no better time to talk to the professionals about tax planning. Many businesses will agree that their financial performance this past year has been rather unusual, what with the uncertainty of Covid-19 and all the obstacles and unknowns businesses have been forced to deal with. This means your tax obligations may be different to previous years. Our bookkeepers can help with this!

It makes sense to plan ahead of the financial year; your business will benefit because we can estimate your tax liability according to your current financials. Together we’ll go through your goals and aspirations and determine the best and most effective business and tax strategies for you. While taking your 2022 goals into consideration, we’ll also run a fine-tooth comb through your business’s performance this year whilst taking a close look at assets, directors fees, payroll, and potential trust distributions.

The information in this article is general in nature and might not be right for your circumstances. Please arrange a meeting with one of our Accountants to discuss your particular needs. Bookkeeper 2 Business Ph (07) 3262 0058

Call: 07 3262 0058 Book your meeting here


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