Step 2 – Work out if you are controlled by any exempt entities
Once you've worked out that you do meet the initial eligibility requirements, you will also need to work out if you are controlled by one or more exempt entities because this too will affect which tax offset you can claim.
An exempt entity is an entity whose ordinary and statutory income is exempt from income tax; or a Commonwealth entity that does not pay tax.
If you are controlled by one or more exempt entities, you cannot claim the 45% refundable offset but you can claim the 40% non-refundable tax offset instead. If this is the case, you don't need to take your aggregated turnover into account to work out which offset you can claim, and you can go to Step 4 - Work out which tax offset you can claim
If you are not controlled by one or more exempt entities you may be entitled to claim the refundable 45% tax offset, if your aggregated turnover is less than $20 million.
To work out if your company is controlled by one or more exempt entities, you will need to consider if one or more exempt entities, their affiliates or both have either:
- shares and other equity interests in your company that give them and/or their affiliates at least 50% of the voting power in your company
- the right to receive at least 50% of any income or capital your company distributes.
You need to identify if you are controlled by any exempt entities because this factor will indicate whether you're eligible for the 45% refundable tax offset or the 40% non-refundable tax offset.