Private ruling: Company tax rate
Date of advice: 19 February 2020
Published: April 2020
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is the receipt of fringe benefit employee contributions passive income under subsection 23AB(1) of Income Tax Rates Act 1986 (ITRA)? | A1: No. It is not a type of income listed in subsection 23AB(1) of the ITRA as 'base rate entity passive income'. | Q2: Is entity A an eligible entity for the purpose of applying a lower corporate tax rate of 27.5% for the 20XX-XX, 20XX-XX and 20XX-XX income years? | A2: Yes. Entity A meets the requirements set out in section 23AA of the ITRA to be a base rate entity and consequently is eligible to be taxed at 27.5%.


Relevant legislative provisions: Income Tax Rates Act 1986 Section 23 | Income Tax Rates Act 1986 Section 23AA | Income Tax Rates Act 1986 Section 23AB


Relevant facts: Entity A operates a consulting activity. | The only activity of Entity A centres around its operations which generate income as personal services income which is paid to the Director, X. | Entity A incurs motor vehicle expenses in respect of the generation of this personal services income. | Entity A is reimbursed in respect of the private use of the company's vehicle by the Director, X. | This reimbursement has been treated as 'other' income of Entity A and assessable to the company. | Entity A does not have any other income or carry out any other activity. | Entity A's aggregated turnover each income year is less than $XX million.