ATO – What attracts our audit attention
To help you taxpayers get things right, you should consider the behaviours, characteristics and tax issues t
The company tax rate for small businesses has been reduced to 27.5% for 2016-17 and the maximum franking credit small businesses 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 are a small business and have issued distributions based on the 30% tax rate, you should tell your shareholders of the correct dividend and franking credit amounts as soon as possible.
This can be done by sending a letter with the correct amounts or issuing an amended distribution statement.
The company should let the ATO know the correct amounts through the company’s annual dividend reporting process.