mariacostel wrote on Dec 24
th, 2015 at 11:06am:
If the business is privately owned then the profits can all be distributed to the owners via salary or distribution thus avoiding company tax. If you decide to pay company tax and then take a distribution, the tax is franked and the end result is exactly the same. So why would you pay company tax at all?
You think it is a good idea to pay 45c personal tax in preference to paying 30c company tax ?
There are millions of companies out there paying tax, we know many high profile companies structure to avoid paying any tax but not everyone is like that.
Quote:If you decide to pay company tax and then take a distribution, the tax is franked and the end result is exactly the same. So why would you pay company tax at all?
No it isn't exactly the same - the distribution as you say is franked because the company paid 30% tax on it.
You get the meaning of this - the company paid the tax on it - the company paid the tax on it ?????
You understand what the company paying the tax on it means. It means that the company paid tax ????
After the company paid tax on it and it is distributed you may still pay a bit more tax on it as it still forms part of your personal tax return and the franked amount is taxed (30%) if your income is taxed at an all over higher rate you then owe the taxman the difference. normally in my experience not a lot.