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The ATO has issued Law Companion Ruling 2019/5, ﬁnalising its guidance on the operation of the new base rate entity test, which applies to determine access to the lower corporate tax rate.
From the 2017/18 income year, a corporate tax entity must be a “base rate entity” to be taxed at the lower rate. Whether or not a company is a base rate entity is also relevant to how that company calculates the amount of a franking credits available to attach to a frankable distribution.
The ruling provides advice on:
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