New rules ensure that companies with more than 80% passive income will not qualify for the reduced company tax rate.
Calculations of a business’s “passive income” would include:
This will apply from the 2017–2018 income year.
The lower company tax rate of 27.5% is available in 2017–2018 for small businesses and corporate base rate entities with turnover of less than $25 million.
You must also “carry on a business” to be eligible for the lower corporate tax rate.