Note this applies to companies only and not to other entities though there is a small business offset for sole traders.
In the 2016/17 year the tax rates for companies with aggregated turnover of less than $10 million the tax rate was reduced to 27.5%. The turnover has to be from carrying on of a business. Thus if the company earns rent or dividends or interest only then it is not carrying on a business.
For the 2017/18 year there is a new name being used called a “base rate entity” to separate these companies. They are businesses with an aggregated turnover of less than $25 million. Also 80% or less of their assessable income is base rate entity passive income such as interest, dividend, rent, royalties and net capital gain.
From the 2018/19 year the threshold is now $50 million.
The level of franking is based on the aggregated turnover, assessable income and base rate passive income of the previous year.
The effect of this can be that as you pass a dividend down a chain of companies then the franking rate can change from 27.5% to 30% to 27.5% etc. And who said that could do your own tax return?
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