The Government has released exposure draft legislation to deny access to the lower corporate tax rate of 27.5% (down from 30%) for companies with predominantly passive income. Under the changes, companies will qualify for the lower tax rate only if:

  • their passive income is less than 80% of their assessable income for the year;
  • they “carry on a business” in that year; and
  • they come below the aggregated turnover threshold for the year ($25 million for 2017–2018).