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Australian SME Tax Cuts Now Law

Monday, October 29, 2018

Legislation to reduce Australia's small business tax rate received Royal Assent on October 25.

The Treasury Laws Amendment (Lower Taxes for Small and Medium Businesses) Bill passed the last of its parliamentary stages on October 18.

The legislation will reduce the small business rate from 27.5 percent to 26 percent from 2020-21 and to 25 percent from 2021-22. The rate was previously scheduled to fall to 25 percent from 2026-27.

The turnover threshold for access to the rate is AUD50m (USD35.2m).

The legislation will also increase the small business income tax offset rate for small businesses with an aggregated turnover of less than AUD5m to 13 percent for the 2020-21 financial year and to 16 percent from 2021-22.