As announced in the 2016-17 Federal Budget, the company tax rate will be progressively reduced to 25% over the next 10 years. However, the measure was amended by Parliament. The amended measure will apply as follows:
- 2016-17 financial year: 27.5% for small businesses with an aggregated turnover of less than $10 million;
- 2017-18 financial year: 27.5% for small businesses with an aggregated turnover of less than $25 million;
- 2018-19 financial year: 27.5% for small businesses with an aggregated turnover of less than $50 million.
From 1 July 2024 onwards, the corporate tax rate will progressively decrease every financial year, eventually falling to 25% in the 2026-27 financial year. If the amendments are approved by the House of Representatives, then the following rates will apply:
- Commencing 1 July 2024: 27%
- Commencing 1 July 2025: 26%
- Commencing 1 July 2026: 25%.
The company tax rate remains at 30% for all companies unless they qualify for the reduced rate up until 2023-24 when all companies qualify for the lower rate.
The changes to the company tax rate and turnover threshold are contained in the table below:
| Income Year | Annual aggregated turnover threshold | Rate for entities under the threshold | Other corporate tax entities |
| 2016-17 | $10 million | 27.5% | 30% |
| 2017-18 | $25 million | 27.5% | 30% |
| 2018-19 | $50 million | 27.5% | 30% |
| 2019-20 | $50 million | 27.5% | 30% |
| 2020-21 | $50 million | 27.5% | 30% |
| 2021-22 | $50 million | 27.5% | 30% |
| 2022-23 | $50 million | 27.5% | 30% |
| 2023-24 | $50 million | 27.5% | 30% |
| 2024-25 | $50 million | 27% | 30% |
| 2025-26 | $50 million | 26% | 30% |
| 2026-27 | $50 million | 25% | 30% |
On 11 May 2017, the Treasury Laws Amendment Bill 2017 was introduced into the House of Representatives. This Bill proposes to progressively extend the lower 27.5% corporate tax rate to all corporate tax entities by the 2023-24 income year, as was originally intended in the 2016-17 Budget measure. The corporate tax rate will then be cut, for all corporate tax entities, to:
- for the 2024-25 income year: 27%;
- for the 2025-26 income year: 26%; and
- for the 2026-27 income year and later income years: 25% (per the table above).
The intention is the progressive extension of the lower 27.5% corporate tax rate to corporate tax entities with aggregated turnover of $50 million or more will commence from the 2019-20 income year. This Bill was before Parliament recently.