TAX ALERT - SBE REDUCED TAX RATES FOR PASSIVE INVESTMENTS?
Yesterday, some of the major news outlets published articles claiming that the ATO may have opened the floodgates for family investment companies to claim back millions of dollars in company tax, after issuing the (draft) ruling.
Until the draft ruling was issued in March, it had been understood that Australia's many passive investment vehicles, used mainly by families and investors to take advantage of a corporate tax rate lower than marginal income tax rates, would not be entitled to the recent rule changes to reduce corporate tax rates for SBEs.
Revenue Minister Kelly O'Dwyer responded to the news reports that "...the policy decision made by the Government to reduce the tax rate for small companies was not meant to apply to passive investment companies."
The ATO has indicated it is working on more detailed guidance on the issue, which should be published "very soon".