It was announced in the budget this year that a staged reduction of the company tax rate will commence in the 2017-18 income year.
Small to medium businesses are set to benefit, as they will qualify earlier for the rate cut. The change involves a progressive increase to the annual aggregated turnover threshold for access to the 27.5% tax rate.
From the 2024-25 income year, there will be a further reduction each year for all companies until the corporate tax rate reaches 25% in the 2026-27 income year.
In the table below, the turnover threshold will be increased to allow more companies to access the lower corporate tax rate.
| Income year | Annual aggregated turnover threshold | Rate (%) |
| 2016-17 (current year) | < $10m | 27.5 |
| 2017-18 | < $25m | 27.5 |
| 2018-19 | < $50m | 27.5 |
| 2019-20 | < $100m | 27.5 |
| 2020-21 | < $250m | 27.5 |
| 2021-22 | < $500m | 27.5 |
| 2022-23 | < $1bn | 27.5 |
| 2023-24 | None | 27.5 |
| 2024-25 | None | 27.0 |
| 2025-26 | None | 26.0 |
| 2026-27 | None | 25.0 |
The proposed reduction in the corporate tax rate to 25% is good news for small business, however, a reduced transition period would be more beneficial to help drive growth faster.
For more information, visit your local TaxAssist Accountants office to see an accountant for a free, initial meeting.
Date published 19 Dec 2016 | Last updated 31 Jan 2025
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