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:
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.
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