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.

For more information, please see below link:

https://www.ato.gov.au/law/view/document?DocID=COG/PCG20177/NAT/ATO/00001&PiT=99991231235958

Should you have any questions or require any assistance, please contact this office.