THE NEW 27.5% CORPORATE TAX RATE: HOW DO I GET IT?

By Andrew Henshaw, Director, Velocity Legal

On 1 July 2017, the new 27.5% corporate tax rate took effect. Many companies that are ‘small businesses’ will qualify for the new tax rate. Companies that do not meet the criteria will continue to have their profits taxed at ‘normal’ corporate tax rate of 30%.

A company that qualifies for the 27.5% company tax rate is called a ‘base rate entity’. Frankly, that term is not the most intuitive or logical, so I will refer to a company that qualifies for the 27.5% company tax rate as a ’27.5% Rate’ company.

The 27.5% corporate tax rate has been in the news frequently over the last month, as it has been suggested that ‘passive investment companies’ could benefit from the 27.5% tax rate. I will discuss that issue and the ins and outs of 27.5% Rate below.

Insight Authors…

ANDREW HENSHAW

Director

Andrew leads Velocity Legal’s Sydney practice.

If you are in a fight with the ATO or looking to restructure your business, you should have Andrew in your corner. Andrew is passionate about getting wins for his clients, solving difficult legal issues, and giving his clients clear and confident guidance. Andrew is a Chartered Tax Advisor, holds a Masters of Law from the University of Melbourne and is the author of ‘Life, Death and Taxes’. Andrew is also a passionate snowboarder and is always up for the next adventure in life.

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Level 49, 360 Elizabeth Street,
Melbourne VIC 3000

Level 10, 580 George Street,
Sydney NSW 2000

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