NO small business tax rate for passive investment companies

There has been much debate as to whether passive investment companies can qualify for the lower Company Tax rate of 27.5%. In short the answer is no

To put this matter beyond doubt, exposure draft legislation has been introduced to ensure that the lower corporate tax rate will only apply where:

  • the company carries on a business in the income year;
  • the aggregated turnover of the company for the income year is less than the aggregated turnover threshold for that income year; and
  • the company does not have passive income for that income year of 80 per cent or more of its assessable income for that income year.
  • Therefore, a passive investment company, or a corporate beneficiary that does not carry on an actual business, should not qualify for the lower company tax rate, but rather would pay tax at 30% of taxable income.

If you are not paying Super on Time the Government is watching you

The government is providing extra funding and an SG taskforce to give the ATO near real time visibility over superannuation guarantee compliance by employers.

Employers with 19 or fewer employees will need to be compliant by 1 July 2019.

The message from the government is simple pay your SG on time.

 

ATO combatting the cash economy

The ATO is using a range of data matching tools to identify businesses that may not be correctly meeting their obligations. Through data matching it can identify businesses that do not have EFT facilities. When they do not that are more likely to make errors.  The ATO have sophisticated methods such as gaining information from banks or industry suppliers as well as major purchases such as car or property.

The messages are clear:

  1. Your Income must match your lifestyle expenses
  2. You must keep detailed and proper records to justify your Income that is reported.