Two-tiered corporate tax âdistortsâ business
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Business tax advisers have endorsed a criticism by the Organisation for Economic Co-operation and Development that Australiaâs two-tiered corporate tax system is distorting how businesses grow and structure their operations.
The OECD in a report published on Wednesday said that the âhighâ 30 per cent corporate rate for large businesses should be aligned with the 25 per cent rate for small and medium enterprises (SMEs) turning over less than $50 million, because a two-rate system ârisks distorting how firms are structured and how they behave around the threshold between the two ratesâ.
Different corporate tax rates create complexity, particularly for growing businesses transitioning to the $50 million turnover threshold.Â