Tax Planning for Company Dividends 2019/20

Tax Planning for Company Dividends 2019/20

The 2019/20 tax rate for companies with aggregated turnover of less than $50m and less than 80% of their income in the form of “base rate entity passive income” is 27.5%. For most of these companies, any dividends paid during the year and before 30 June 2020 can be franked to 27.5%.

As the company tax rate for such companies is scheduled to reduce to 26% from 1 July 2020, the franking rate will also reduce to 26%. Therefore, dividends would need to be declared and credited before 30 June 2020 to use the higher franking rate.

If you would like to know more about this tax planning strategy please do not hesitate to ☎️ our office.