The Government’s proposed company tax reduction (see here) will have a flow on effect for medium credit unions, whose notional taxable income is between $50,000 and $150,000.
The 45 per cent rate that applies to the taxable income of recognised medium credit unions reflects the current 30 per cent corporate tax rate. If the corporate tax rate is reduced to 29 per cent, the medium credit union rate will be reduced to 43.5 per cent.
This reduction applies for the 2013-14 income year and for subsequent income years. However, if a recognised medium credit union is a small business entity, the reduction also applies in the 2012-13 income year.
UPDATE 10 May 2012: This proposal has been abandoned