Rate Change for Franking Credits
The company tax rate for small business has been reduced to 27.5% for 2016-17 and the maximum franking credit small business clients can allocate has decreased to 27.5% (previously 30%). This reduced rate applies to companies with an aggregated turnover of less than $10 million.
If you’re a small business client and have issued distributions based on the 30% tax rate then you should notify your shareholders of the correct dividend and franking credit amounts as soon as possible. You can do this by sending them a letter with the correct amounts or issuing an amended distribution statement.
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Should you have any questions or require any assistance, please contact this office.