The Australian Tax Office and the company tax rate for small businesses – what’s all the fuss about?
A key part of the Government’s Budget package last year was a reduction in company tax rates for small businesses. The Australian Tax Office (ATO) recently interpreted “small business” to include companies that simply generate ‘passive income’ from investments. The Government has responded that it did not have these types of entity in mind when it decided to introduce tax cuts for small businesses. By Dr. Drew Donnelly, Compliance Quarter Today we summarise the disagreement between the ATO and the Government over the tax rate. Budget 2016: The tax enterprise plan In Budget 2016, the Government unveiled a ten-year enterprise tax plan aimed at supporting jobs and economic growth, particularly through tax relief for small businesses. One aspect of this plan was an incremental reduction in the company tax rate…