The Federal Budget has delivered good news for businesses
Updated: Feb 7
The beginning of the 2016-17 income year will see companies with turnover less than $10 million taxed at a rate of 27.5%. This means around 870,000 companies will enjoy a decrease in their tax rate.
The government will also continue to extend the turnover threshold, allowing more businesses to access to the lower company tax rate of 27.5%. The turnover threshold is said to progressively increase each year as follows:
$25 Million in the 2017-18 income year;
$50 million in the 2018-19 income year;
$100 million in the 2019-20 income year;
$250 million in the 2020-21 income year;
$500 million in the 2021-22 income year; and
$1 billion in the 2022-23 income year.
From 1 July 2016, the government also plans to increase and extend access to the unincorporated small business tax discount to unincorporated businesses with a turnover of less than $5 million.
The unincorporated small business tax discount rate will increase to 8% (capped at $1,000). Following this increase, the discount rate will progressively increase in phases over 10 years, to reach a final discount rate of 16% from 1 July, 2026.