Q: A client has a few different businesses. One has a turnover above $2 million, while another has a turnover below $2 million. When preparing the tax return for the smaller entity, can the accountant apply the 28.5% company tax rate, or does she need to consider the entire group, which has a turnover above $2 million?
A: The 28.5% company tax rate applies only to businesses classified as small business entities, which have an aggregate turnover of less than $2 million. Aggregate turnover includes the total annual income of all connected or affiliated businesses. Since the combined turnover of the two businesses exceeds $2 million, the lower tax rate cannot be used for the smaller entity.
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