Australia

A corporate tax rate of 26% applies to certain small business corporate tax entities with an aggregated turnover of less than 50 million Australian dollars (AUD) for the 2020/21 income year, provided that the company does not derive substantial passive income. The rate for these entities will reduce to 25% from the 2021/22 income year. The corporate tax rate for all other corporate tax entities remains at 30%. See the Taxes on corporate income section.

Temporary economic stimulus measures introduced as part of the Federal Government’s economic response to COVID-19 include:

• JobKeeper wage subsidy and cash flow assistance for eligible businesses, as well as not-for-profits (NFPs), to help them stay in business and keep their employees in jobs, which was extended in a revised form until 28 March 2021. See the Tax credits and incentives section for more information.
• Supporting business capital investment through enhanced tax concessions, including for business with aggregated turnover of up to AUD 5 billion the choice to claim an immediate tax deduction for the cost of an eligible depreciating asset, among other measures. See the Deductions section for more information.
• New JobMaker Hiring Credit for eligible businesses that take on additional employees aged 35 years and under from 7 October 2020 until 6 October 2021. See the Tax credits and incentives section for more information.
• A temporary loss carry-back measure for companies with an aggregated turnover of less than AUD 5 billion which have tax losses incurred in the 2019/20, 2020/21, and/or 2021/22 income years for offset against taxed profits from the 2018/19 or later income years. See the Deductions section for more information.

For income years commencing on or after 1 July 2019, the concept of a 'significant global entity' (SGE) was expanded to ensure that when working out whether or not the entity is part of an accounting consolidated group with global revenue of at least AUD 1 billion, it is no longer necessary that the company actually be included in an accounting consolidated group. The new concept of a Country by Country Reporting Entity (CbCRE), which is a similar, but narrower, concept to an SGE, was also introduced. An entity that is an SGE and CbCRE is subject to additional integrity rules. See the Group taxation section for more information.

For income years commencing on or after 1 July 2021, a more targeted research and development (R&D) incentive applies. See the Tax credits and incentives section for more information.