Small and Medium Business Tax Cuts

On Friday 31 March 2017, following an extended sitting of the Australian Senate, the Government achieved another political victory in the face of brinksmanship which passes for the current Parliamentary process: a deal was struck with the Senate crossbench to pass a watered down version of the Government's key economic policy initiative - the reduction of the company tax rate to 25% over 10 years.

Under the compromise deal, small and medium businesses will benefit:

  • as the company tax rate reduces to 25% over the next 10 year period: and
  • the turnover threshold increases so that more company businesses can access lower tax rate.‚Äč

The standard company tax rate will remain at 30% for companies with an annual turnover in excess of the small/ medium business turnover cap.

For unincorporated small/medium businesses, there will be an increase in the rate used to calculate the small business tax offset. But the offset will remain capped at $1,000, so the offset will continue to be of limited practical effect; certainly not as advantageous as the small / medium business company tax cuts.

To read the full article please visit the RSM Website HERE! 

Author

Craig Cooper

RSM Partner