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Response to Henry Tax Review benefits small business, says Deloitte


Sunday, 2 May 2010: The Federal Government has announced today that SMEs will benefit from a lower corporate tax rate of 28% and an immediate tax deduction for assets costing less than $5,000. Both measures will commence from 1 July 2012.

According to professional services firm Deloitte, small businesses will welcome these measures and will also look forward to further announcements from the Government.

Interestingly small business will benefit from the corporate tax rate reduction earlier than the rest of corporate Australia for whom the tax rate will reduce to 29% on 1 July 2013 and to 28% on 1 July 2014.

The Henry Review has recommended that the corporate tax rate be reduced to 25% over time.

“Companies would welcome further tax relief as it has been recognised in the Henry Review that Australia’s corporate tax rate is currently too high when compared to other similar sized OECD countries”, said Deloitte Tax Partner David Pring.

The Henry Tax Review has recommended further small business concessions for which the Government is yet to announce its response. These measures are:

  • The small business entity turnover threshold should be increased from $2 million to $5million and consideration should be given to adjusting the $6 million net asset value test under the small business CGT concessions (Recommendation 30)
  • Companies should be allowed to carry back revenue losses to offset against prior year’s taxable income, with the amount of the tax refund limited to the company’s franking account balance (Recommendation 31)
  • The rules around the taxation of trusts to be updated and rewritten to reduce complexity (recommendation 36)
  • A flow through tax entity regime for closely held companies should be considered in the future for closely held companies and trusts (Recommendation 38)

”Small Business will welcome further announcements in this regard as they will assist in reducing tax complexity and increase fairness. For instance, allowing the carry back of tax losses would be extremely beneficial to SMEs as it would allow them to obtain cash refunds of tax already paid to the Tax Office,” added Deloitte Private Tax partner Spyros Kotsopoulos.

Last Updated: 


Jane Kneebone
Deloitte Australia
Job Title:
Director, Corporate Affairs & Communications
Tel: +61 3 9671 7389, Mobile: +61 416 148 845




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