For 2021-2022 income year a base rate entity is a company that both:

  • has an aggregated turnover of less than the aggregated turnover threshold
  • 80% or less of their assessable income is base rate entity passive income

The tax rate for base rate entity for 2021-2022 year has been reduced to 25% (for all other companies the rate remains at 30%)

Base rate entity passive income is:

  • corporate distributions and franking credits on these distributions
  • royalties and rent
  • interest income (some exceptions apply)
  • gains on qualifying securities
  • a net capital gain
  • an amount included in the assessable income of a partner in a partnership or a beneficiary of a trust, to the extent it is traceable (either directly or indirectly) to an amount that is otherwise base rate entity passive income.

Further information can be obtained by following the link below.