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Rate change for franking credits

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.


Griffin & Associates

79 Denham St, Townsville City QLD 4810

Phone 07 4772 6588

Chartered Accountants