Government introduced Treasury Laws Amendment Bill 2016 (Enterprise Tax Plan) on 1st September 2016 that proposed to progressively reduce the corporate tax rate from 30% to 25% for all corporate entities. The bill was later amended to apply to Base rate entities – aggregated turnover of less than $25 million for the 2017-18 income year and less than $50 million for the 2018-19 income year.
Waiting for Treasury Laws Amendment Bill 2017 introduced on 11th May 2017 to pass, which will make clearer the entities eligible for the lower corporate tax rate ahead.
As there are no suggested changes to the law for the 2016-17 income year, companies are required to lodge their tax returns under the existing law. The company must meet the small business entity definition to qualify for the lower 27.5% tax rate in 2016-17 i.e. aggregated turnover of less than $10 million and carrying on a business.