Australian Treasurer Josh Frydenberg has issued a joint release on the reduction of the corporate tax rate to 26% for businesses with turnover of less than AUD 50 million with effect from 1 July 2020.
Small business tax cuts kick in from July 1 2020
From July 1 2020, small and family businesses will be paying less tax as a result of legislated tax cuts passed by the Morrison Government.
As the 2020-2021 financial year begins, incorporated small and family businesses with a turnover of less than $50 million will see their company tax rate reduced from 27.5% to 26%.
Unincorporated businesses will also benefit as the rate of the small business income tax offset increases from 8% to 13%.
The changes mark the next stage of the Morrison Government's accelerated small business tax cuts, legislated in October 2018, which brought forward tax relief for small and medium businesses by five years.
Minister for Employment, Skills, Small and Family Business Michaelia Cash said this was a big win for the small business sector.
"Small businesses are the backbone of our economy. We have around 3.5 million small businesses across the country. They are a vital part of our COVID-19 recovery," Minister Cash said.
"As COVID-19 health restrictions ease and the economy re-opens, this tax relief will support Australian small and family businesses to bounce back stronger and get to the other side of this crisis."
"Bringing forward these tax cuts will be a shot in the arm for hard working small and family businesses at a time they need it most, leading to more investment, increased employment opportunities for Australians and helping small business owners keep more of their money."
The Treasurer said these legislated tax cuts would provide further support to small business during the COVID-19 crisis.
"The Coalition Government has delivered extensive support for small and medium sized businesses during the COVID-19 crisis. We have extended the Instant Asset Write Off to $150,000 for another six months, are providing the Cash Flow Boost of up to $100,000 for employing small businesses, and are boosting access to capital through our COVID-19 SME Guarantee Scheme."
"This is in addition to the extensive income support JobKeeper, JobSeeker, and our Supporting Apprentices & Trainees wage subsidy are providing to support small businesses and sole traders across Australia."