In recent times the Government passed legislation to progressively reduce the company tax rate for companies with a turnover of up to $50 million. The Government has just announced that it will introduce legislation into Parliament to clarify confusion regarding the applicable tax rate for companies. The Government has stated that it will clarify that only active trading companies qualify for the lower tax rate, meaning that companies that are solely engaged in passive investments in shares and property, irrespective of the level of turnover, should calculate their PAYG Instalments on the basis of the 30% rate applying.
If your company is actively trading and its turnover qualifies for the 27.5% tax rate, any PAYG Instalments can be calculated based on the reduced 27.5% tax rate. The progressive rates of corporate tax rate reduction in future years is as follows: