In this post, we look at the current taxation environment that affects all size businesses across the country, and what the current corporate tax rates are.<\/p>\n\n\n\n
Over the last few years, there has been a global trend to lower corporate taxes. 2017 alone, saw a lot of talk about changing tax rates both at home and abroad. The topic heated up when in December 2017, the US slashed its company tax rate by 14% \u2013 from 35 to 21%.<\/p>\n\n\n\n
The Organisation for Economic Co-operation and Development (OECD) first report<\/a> published in January 2019, compared business tax rates across more than 100 countries.<\/p>\n\n\n\n The report found Australia had a larger corporate tax rate of 30%, higher than many competitors including New Zealand, Italy, South Korea, Canada, the United States, Norway and Britain.<\/p>\n\n\n\n In their report, the OECD did note that Australia offered businesses the lowest direct subsidies and tax breaks for research and development.<\/p>\n\n\n\n Australia had not lowered its corporate tax rates since 2000. However, in May 2017, the Australian government passed the first phase of the Enterprise Tax Plan<\/a>, cutting the company tax rate to 27.5 percent (from 30 percent for companies with an annual turnover of up to $50 million over the next four years.)<\/p>\n\n\n\n On 16 October 2018, the Government introduced the Treasury Laws Amendment (Lower Taxes for Small and Medium Businesses) Bill 2018.<\/p>\n\n\n\n This will accelerate future reductions in the corporate tax rate for base rate entities. Further company tax cuts will see the company tax rate at 25 per cent by 2021-2022. For larger companies (above $50 million turnover), the rate will remain at 30%.<\/p>\n\n\n\n A company business structure is taxed as a separate legal entity that does its own tax return.<\/p>\n\n\n\n These businesses are required to lodge an annual corporate tax return which shows:<\/p>\n\n\n\n There is no tax-free threshold for a company business structure.<\/p>\n\n\n\n The company tax rate 2019 financial year is currently 30%<\/strong>. The small business company tax rate is 27.5%<\/strong>.<\/p>\n\n\n\n From the 2018\u201319 income year, companies that are base rate entities must apply the lower 27.5% company tax rate.<\/p>\n\n\n\n A base rate entity is a company that:<\/p>\n\n\n\n If your business turns over $50 million or more, the company tax rate is 30 per cent. There are a few exceptions to these corporate tax rates, depending on your industry and NFP.<\/p>\n\n\n\n The only change during this financial year is that the base rate has increased from $25 million to $50 million turnover, with the company tax rate remaining the same at 27.5%.<\/p>\n\n\n\n For the next financial tax year 2019-2020, the company tax rate will remain at FY19 company tax rates.<\/p>\n\n\n\n A non-resident company is taxed on its Australian source income at the same rate as a resident company. The company tax rate for the 2019 financial year is currently 30%<\/strong>. The small business company tax rate is 27.5%<\/strong>.<\/p>\n\n\n\n Taxable income and the tax rate may vary under limited circumstances, such as industry or business structure.<\/p>\n\n\n\n Full details of the new Australian corporate tax rates can be found here<\/a><\/p>\n\n\n\n The 27.5% rate will remain the same for the 2019-20 income year, however, the base rate entities turnover threshold will rise to under $50 million.<\/p>\n\n\n\n The rate will then reduce to 25% by the 2021\u201322 income year.<\/p>\n\n\n\n From the 2017\u201318 income year, companies that are base rate entities must apply the lower 27.5% small business tax rate.<\/p>\n\n\n\n A base rate entity is a company that:<\/p>\n\n\n\n If your business turns over $25 million or more, the rate is 30 per cent. There are a few exceptions to these company tax rates, depending on your industry and NFP.<\/p>\n\n\n\n For the 2016\u201317 income year, the lower tax rate is 27.5%. The lower small business tax rate must be applied to businesses that:<\/p>\n\n\n\n If your business turns over $10 million or more, the rate is 30 percent.<\/p>\n\n\n\n If you still have questions regarding your business, its turnover or eligibility for the new or existing tax rates, International Accounting Solutions can help.<\/p>\n\n\n\n Get in touch via the form on this page, or call +61 2 8298 5301 to discuss your business taxation and accounting needs<\/a>.<\/p>\n\n\n\nWhat is company tax in Australia?<\/h2>\n\n\n\n
Current company tax rates<\/h2>\n\n\n\n
2019 tax rates<\/h3>\n\n\n\n
What is the foreign company tax rate in Australia?<\/h2>\n\n\n\n
Future year corporate tax rates<\/h2>\n\n\n\n
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\n\t \nIncome Year<\/th> Turnover Threshold<\/th> Tax rate for entities under the threshold<\/th> Tax rate for all other companies<\/th>\n<\/tr>\n<\/thead>\n \n\t 2018-19 to 2019-20<\/td> $50m<\/td> 27.5%<\/td> 30.0%<\/td>\n<\/tr>\n \n\t 2020-21<\/td> $50m<\/td> 26%<\/td> 30.0%<\/td>\n<\/tr>\n \n\t 2021-22<\/td> $50m<\/td> 25%<\/td> 30.0%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n\n Past corporate tax rates<\/h2>\n\n\n\n
Company tax rates 2018<\/h3>\n\n\n\n
Company tax rates 2017<\/h3>\n\n\n\n
Still have questions about company and corporate taxes?<\/h2>\n\n\n\n
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