Tax rates and loss carry-back tax offset for companies qualifying as base rate entities (BREs) in Australia.

In this article: 

• Base Rate Entity Qualification Criteria
• Base Rate Entity Tax Rates by Income Year
• Loss Carry-Back Tax Offset Opportunity
• Additional Key Considerations

Base Rate Entity Qualification Criteria

• Aggregated turnover for the income year is below $50 million.
• 80% or less of assessable income in the income year is base rate entity passive income (such as dividends, royalties, rent, some interest, and certain capital gains).
• These criteria are assessed annually; a company may qualify in some years and not in others depending on its circumstances.
• The turnover threshold and passive income test have remained stable since 2018–19.

Base Rate Entity Tax Rates by Income Year

• 2018–19 to 2019–20: 27.5%
• 2020–21: 26%
• 2021–22 onwards (including 2024–25 and 2025–26): 25%
• Other companies pay the standard 30% rate.

Loss Carry-Back Tax Offset Opportunity

• If a BRE incurs losses in a year, it can carry those losses back to a previous profitable year and receive a refundable tax offset.
• The refundable offset rate is the base rate entity tax rate that applied in the loss year (e.g., 27.5%, 26%, or 25% depending on the year).
• This can often produce a better economic result than carrying losses forward, especially for loss years taxed at the higher BRE rates of 27.5% or 26%.

Additional Key Considerations

• The base rate entity tax rate of 25% continues to apply effectively for the 2024–25 and 2025–26 income years.
• Qualification as a BRE is determined independently for each income year based on that year's turnover and income composition.
• The aggregated turnover threshold for BRE status has remained at $50 million since 2018–19 with no announced changes.
• When calculating tax outcomes or planning with loss carry-backs, the applicable BRE tax rate for the relevant loss year must be used.
• Companies not meeting the BRE criteria pay the standard 30% company tax rate.

This guide reflects the current rules and rates confirmed by the Australian Taxation Office and other authoritative resources as recently as mid-2025.