The Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016 (sexy title, we know) is upon us and over the next 10 years the government will roll out a series of cuts to the corporate tax rate for businesses.
While there’s a lot of complex information out there, here are a few things that’ll help clear up some of the confusion:
Who gets a tax cut first?
First up are businesses with annual turnover of up to $10 million. From this financial year they will have their tax rate lowered to 27.5%.
Unincorporated businesses will also receive the tax cut that was promised to them in the last budget, with the tax discount for unincorporated businesses increasing from 5% to 8% this year.
What about businesses that turn over more than $10 million?
In short, they’ll have to wait a little longer.
Companies with up to $25 million in annual turnover will have to wait until 2017-18 to see their rate drop to 27.5%, while those turning over between $25 million and $50 million each year will have to wait until 2018 to receive a tax cut.
What will businesses do with the money saved?
In addition to out own clients that we’ve spoken to about the tax cuts – as well as other colleagues and business owners – the general consensus is that the new tax cuts would allow SMEs to address underemployment by reinvesting in staff, as well as giving businesses more confidence to invest in future plans.
Want to know more about how the tax cuts might affect your business? Talk to your Halkin team today – we’ll help translate it into English.