Small business is still a vote winner with the Government and Opposition teaming up to accelerate tax cuts for the sector by 5 years impacting on an estimated 3.3 million businesses.
Parliament recently passed legislation to accelerate the corporate tax rate reduction for corporate tax entities that are base rate entities (BREs). Under the new rules:
- A 26% rate will apply to BREs for the year ending 30 June 2021, and
- A 25% rate will apply to BREs from 1 July 2021
The amending legislation also increased the small business income tax offset rate to 13% of an eligible individual’s basic income tax liability that relates to their total net small business income for the 2020-21 income year and 16% for the 2021-22 income year onwards.
The small business income tax offset continues to be capped at $1,000 per individual per year.
New Corporate Tax Rates
|Year||Aggregated annual turnover threshold||Eligible companies*||Entities under the threshold||Other corporate tax entities|
|2015-16||$2m||SBE ($2m threshold)||28.5%||30%|
|2016-17||$10m||SBE ($10m threshold)||27.5%||30%|
|2018-19 to 2019-20||$50m||BRE||27.5%||30%|
The cents per kilometer car expense rate increased from 66 cents to 68 cents per …