The company tax rate is 30% for entities with aggregated turnover above $50 million or with passive income above 80%.

The company tax rate for entities with aggregated turnover below $50 million is generally as follows:

Franking a dividend however is based on the prior year tax rate.

Although it sounds great, many companies will end up with excess franking credits trapped in the company from when the rates were 30%.

Legislation has been passed by parliament on 17 February 2020 that enable the ATO to seek recovery of unpaid GST of a company from its directors. This new law applies from 1 April 2020.

For un-lodged Activity Statements, the ATO can now estimate the entity’s GST and require the amount to be paid within 21 days otherwise the director will become personally liable for the debt.

Recommended Action

Directors should ensure now that they:

Are aware of the GST affairs of their company
Identify any potential risks or exposure
Ensure that the company has adequate controls around its GST accounting and BAS preparation processes
Are aware of any un-lodged Activity Statements
Assess who is the most appropriate person to be the director

If you don’t hold private hospital cover – or are thinking about dropping it – make sure you understand the financial consequences. You could be hit with an extra tax surcharge of up to 1.5% or cost yourself extra premiums in future.

Levies, surcharges and loadings – the terminology around health insurance and tax can be bewildering! But if you don’t hold private hospital cover, you need to understand how this may affect your tax.

The Medicare levy surcharge (MLS) is a tax penalty you must pay if you earn above a certain amount and don’t take out a sufficient level of private hospital cover for you and all of your dependants. It’s designed to give you a financial incentive to insure privately. The MLS is applied by the ATO at tax time and included in your assessment.