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  • Lower company tax rate

    The lower company tax rate applies to a corporate tax entity that is a base rate entity (BRE). The company tax rate of 30% applies to all other corporate tax entities.

    We recognise that the majority of corporate tax entities will apply the correct tax rate. However, situations that attract our attention include:

    • corporate tax entities not eligible to be a BRE claiming the concessional tax rate such as entities that
      • fail to include the annual turnover of all of their connected entities and affiliates in calculating their aggregated turnover
      • have 80% or greater of their income as base rate entity passive income
       
    • artificial or contrived arrangements to change the company tax rate, such as arrangements where groups
      • restructure to reduce their aggregated turnover
      • shift the derivation of non-passive income to companies who derive only passive income
      • shift passive income to companies deriving non-passive income.
       

    See also

    Last modified: 09 May 2022QC 69454