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  • The lower company tax rate is changing soon

    10 March 2021

    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.

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