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.