Changes to company tax rates

There are changes to the company tax rates. The full company tax rate is 30% and the lower company tax rate is 27.5%. Following shows when to apply the lower rate and how to work out franking credits.

Company tax rates apply to:

companies
corporate unit trusts
public trading trusts.

The full company tax rate of 30% applies to all companies that are not eligible for the lower company tax rate. Eligibility for the lower company tax rate depends on whether you are a:

base rate entity from the 2017–18 income year
small business entity for the 2015–16 and 2016–17 income years.

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· Department of Human Services – specified benefits and entitlements 2017–18 to 2019–20 financial years data matching program protocol

At a glance

This protocol has been prepared to meet the Guidelines on Data Matching in Australian Government Administration 2014 (Guidelines) published by the Office of the Australian Information Commissioner (OAIC).

The Australian Taxation Office (ATO) will collect information from the Department of Human Services (DHS) for the following benefits and entitlements:

Paid parental leave scheme.
Medicare entitlement statements.

This data will be compared with claims made in income tax returns for the invalid and invalid carer tax offset and for exemptions from paying the Medicare levy and Medicare levy surcharge.

In recent years there have been a number of legislative changes for invalid and invalid carer tax offset. The invalid and invalid carer tax offset is reduced for any year the claimant received paid parental leave. The paid parental leave data will allow the ATO to ensure the offset is correctly claimed.

Medicare provides Australian residents access to health care. To help fund the scheme, most taxpayers pay a Medicare levy of 2% of their taxable income. Medicare levy is payable by individuals residing in Australia who are eligible for Medicare benefits.

Individuals who are not entitled to Medicare benefits can claim an exemption from the Medicare levy in their income tax return. To obtain an exemption, taxpayers must not be eligible for Medicare benefits and apply for a Medicare entitlement statement.

The DHS Medicare Entitlement Statement Unit process Medicare entitlement statement applications. The Medicare entitlement statement is applied for using the approved form and must be reapplied for each financial year. Individuals may have a Medicare entitlement statement for multiple periods in the same financial year. Exemption from the Medicare levy extends to the Medicare levy surcharge.

Taxpayers who don’t have private hospital health insurance, may have to pay the Medicare levy surcharge in addition to the Medicare levy. Medicare levy surcharge depends on the period without appropriate private hospital health insurance and your income.

The program will enable the ATO to avoid any unnecessary contact from ATO for those that are genuinely entitled to claim these offsets and exemptions.

ATO have been undertaking this data matching program for nine years and intend to continue conducting this data matching program for a further three years.

· GST at settlement – a guide for purchasers and their representatives

The following information explains GST at settlement to purchasers of certain types of property and to their representatives.

On or after 1 July 2018, if you purchase new residential premises or potential residential land you may be required to withhold an amount from the price of the supply and pay it to the Australian Taxation Office.

Your supplier is required to provide you with information to assist you comply with your withholding obligation.

You can incur penalties if you fail to pay the required withholding amount to ATO.

Transitional arrangements apply to contracts entered into before 1 July 2018.

Note: When ATO refer to purchasers they are also referring to lessees under long-term leases.

· GST at settlement – a guide for suppliers and their representatives

On or after 1 July 2018, if you are a supplier of residential premises or potential residential land you may be required to notify your purchaser in writing as to whether or not they have a withholding obligation. If your purchaser does have a withholding obligation you must provide additional information, in writing, to your purchaser.

You can incur penalties if you fail to provide the required notice.