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.

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ANDREW HENSHAW

Managing Director

Andrew acts for a diverse range of private businesses, high net-wealth individuals and family groups. He specialises in business structuring, tax disputes and complex tax issues. He is passionate about leading by example, getting wins for his clients, solving difficult legal issues and … snowboarding!

 
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