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Understanding the Corporate Tax Rate: A Guide for 2019

As tax rates continue to evolve, businesses must stay ahead of the changes. This blog will break down the corporate tax rate changes for 2019, highlighting how these affect business planning, cash flow management, and long-term financial strategy.


In 2019, Australia implemented significant changes to its corporate tax rates, impacting business planning, cash flow management, and long-term financial strategies. Understanding these changes is crucial for businesses to navigate the evolving tax landscape effectively.

Corporate Tax Rates in 2019

In 2019, the corporate tax rate for Australian companies was 30%. However, a reduced tax rate of 27.5% applied to base rate entities—companies with an aggregated turnover of less than $25 million and 80% or less of their assessable income being base rate entity passive income.


Implications for Business Planning

The tax rate changes necessitated adjustments in business planning:

  • Cash Flow Management: Reduced tax rates for eligible companies improved cash flow, allowing for reinvestment into business operations.

  • Financial Strategy: Companies needed to reassess their financial strategies to optimize tax benefits and ensure compliance with the new tax rates.

Long-Term Financial Strategy

The tax rate changes influenced long-term financial strategies:

  • Investment Decisions: Lower tax rates enhanced the attractiveness of investments, potentially leading to increased capital expenditures.

  • Profit Distribution: Companies considered the impact of tax rates on dividend distributions and retained earnings.


The corporate tax rate changes in 2019 had significant implications for Australian businesses. Understanding these changes was essential for effective business planning, cash flow management, and long-term financial strategy development.

If you would like to enquire about corporate strategies, book a complimentary consultation with DGMS Group.


  1. Australian Taxation Office. (2024). Changes to company tax rates. Retrieved from https://www.ato.gov.au/api/public/content/0-11c3cbc8-adf6-4118-bc2c-0c5044452da1

  2. PwC. (2024). Australia - Corporate - Taxes on corporate income. Retrieved from https://taxsummaries.pwc.com/australia/corporate/taxes-on-corporate-income

  3. Tax Foundation. (2024). Australia Tax Rates & Rankings. Retrieved from https://taxfoundation.org/location/australia/

  4. Australian Government Department of the Treasury. (2024). International trends in company tax rates. Retrieved from https://treasury.gov.au/sites/default/files/2019-03/02_International.pdf

  5. HLB Mann Judd. (2024). Australian Corporate Tax Rate Changes. Retrieved from https://hlb.com.au/corporate-tax-rate-changes-bring-certainty-but-add-complexity/


 
 
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