The Government today released draft tax legislation for consultation to clarify that passive investment companies cannot access the lower company tax rate for small businesses.
The Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer MP, said the policy decision made by the Government to cut the tax rate for small companies was not meant to apply to passive investment companies.
The exposure draft bill amends the tax law to ensure that a company will not qualify for the lower company tax rate if 80 per cent or more of its income is of a passive nature (such as dividends and interest).
“The Turnbull Government is committed to lower taxes on business because we want to see them invest and grow.”
“These amendments will provide greater clarity about who qualifies for the lower company tax rate by excluding passive investment companies.” Minister O’Dwyer said.
The draft legislation and supporting materials are available on the Treasury website.
Submissions close 29 September 2017.