Treasury has released a draft Bill to amend the Income Tax Rates Act 1986 to reduce the corporate tax rate from 30 per cent to 29 per cent for the 2013-14 income year and for subsequent income years.

For small business companies, the 29 per cent rate will apply from the 2012‑13 income year.

A small business entity is defined in section 328-110 of the Income Tax Assessment Act 1997 (ITAA 1997). A company is a small business entity that qualifies for the early reduction in the corporate tax rate if:
• the company carried on business in the 2011-12 income year and had an aggregated turnover of less than $2 million in that income year; or
• the company carries on business in the 2012-13 income year and has an aggregated turnover of less than $2 million in that income year.

UPDATE 10 May 2012: This proposal has been abandoned