In order to help Australian businesses keep growing, create more jobs and be more competitive in the global market, the Federal Budget 2016 announced some attractive incentives including lower the tax burden on enterprise to promote Australian economic growth and encourage investments from overseas. At CLY Tax Accountants & Bookkeepers Croydon, our professional Accountants in Croydon would like to provide some tax updates for local small business owners in Croydon and surrounding suburbs, such as Ringwood and Lilydale, to be well prepared for their future business and personal Tax Return Croydon.
Where does Australian corporate tax rate sit in the Global market?
The average corporate tax rate for Organisation of Economic Cooperation and Development (OECD) member states is 23%. The Australian current corporate tax rate for Financial Year 2015/2016 is 28.5%, which is still well above OECD average.
Reduce company tax rate and increase small business turnover threshold
In 2016/2017, the government is going to reduce the company tax rate to 27.5% for small businesses with a turnover threshold of less than $10 million, in which the small business turnover threshold is also increased from $2 million for 2015/2016. The increased threshold will make the lower tax rate available for around 870,000 companies with over 3.4 million employees according to the government model. Moreover, the government is committed to keep decreasing the tax rate progressively for all companies in Australian to 25% in the next ten years until 2026/2027.
Increase unincorporated small business tax discount
Many small businesses are not companies, but they still contribute at a lot (about $340 billion in 2013/2014) to the Australian economy and employ over 3 million people. The government is fully aware of the situation, so it is going to increase the unincorporated small business tax discount in the next 10 years from 8% for 2016/2017 to 16% for 2026/2027. The discount will capped at $1,000 per individual. This will be available for unincorporated businesses with a turnover of less than $5 million.
If you are a current small business owner who want to know where your current tax position sits and how it can be improved in future with the latest Budget tax update, our Accountants and Tax Agents in CLY Tax Accountants & Bookkeepers Croydon are always here to help. We have helped prepare lots of Croydon Tax Returns for both businesses and individuals with satisfactory feedback. If you are thinking of start a new business and want to know how your future tax may look like, we are more than happy to help you all along the way with our professional knowledge and rich experience. Please Contact Us today for anything related to small business and tax!