From the 2016–17 financial year, the small business company tax rate has been reduced to 27.5%. This lower rate applies to small businesses with an aggregated turnover of less than $10 million. For the 2017-18 financial year the reduced company tax rate will apply to companies with an aggregated turnover of $25 million.
The reduced company tax rate will progressively apply to companies with a turnover less than $50 million by the 2018–19 income year. The rate will then reduce for these companies to 25% by the 2026–27 income year.
The maximum franking credit that can be allocated to a frankable distribution paid by a small business companies has reduced to 27.5% from the 2016–17 income year. This is in line with the small business company tax rate for the income year.
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