The government is proposing 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.
