The government is proposing tax cuts for small business. It aims to reduce the income tax rate to 28.5 per cent for small business companies (i.e. with an aggregated annual turnover of less than $2 million).
Companies with an aggregated annual turnover of $2 million or above will continue to be subject to the current 30 per cent tax rate on all their taxable income.
The current maximum franking credit rate for a distribution will remain unchanged at 30 per cent for all companies, maintaining the existing arrangements for investors.
These changes apply from the 2015–16 income year.
Legislation and supporting material
Legislation for this measure has not yet been drafted. This web page will be regularly update to reflect progress.