What is a base rate entity? And what rates of tax are payable by these entities

Home, - What is a base rate entity

Question 1 - What is a base rate entity? And what rates of tax are payable by these entities?

Answer -

An entity is classified as a Base rate entity for an income year if its aggregated turnover for the income year is below the aggregated turnover threshold for that year and it has 80% or less of its assessable income in the year classified as Base rate entity passive income. Such Base rate entity passive income includes corporate distributions, franking credits, royalties, rent, interest earnings, capital gains, share of partnership income and profits on qualifying securities.

For the Income Year 2021-22 and future years, the tax rate payable by such entities is 25% with an aggregate threshold turnover limit of $50 million.

Question 2 - In what circumstances can a taxpayer challenge an assessment outside the ordinary appeal process. Discuss based on statutory and common law.

Answer -

As per TR 2011/5, a taxpayer can challenge an assessment beyond the process of ordinary appeal in limited circumstances. Such assessment can be challenged under section 175A of the ITAA 1936. If the taxpayer is dissatisfied' under section 175A of ITAA, 1936 because of the Commissioner making an assessment which is adverse to the taxpayer and there exists groundsfor the taxpayer to challengesuch assessment. Such objections should also meet the conditions of section 14ZU.

A taxpayer dissatisfied with the Commissioner's objection decision may apply to the AAT for review of the decision or appeal to Federal Court against such decision. He may seek review of the objection decision under section 14ZZ even if they are dissatisfied with only part of the decision.

Leave a comment


Related :-