The government has announced it will be putting in place a “faireer” dividend for companies that invest in renewable energy, such as wind, solar and hydro.
It comes amid concerns that some big investors are not investing in these sectors.
The Government will also be providing incentives for companies to buy back shares at lower price points, which will lower the amount they have to pay to buy shares.
The announcement came at the same time as the Australian Taxation Office announced it had found a new loophole to tax the income of companies that are self-employed.
It said that a company may be eligible to deduct capital gains on its first $15,000 of income if the amount of the gain is more than $15 per cent of the company’s total income, but the company is not allowed to deduct the gain.
However, the government has also announced it would be making the capital gains tax rates for Australian businesses even lower, from 5 per cent to 3 per cent.
“This measure will be introduced to give Australians more certainty as to how their tax money is spent, and it will help businesses make more investment decisions,” Treasurer Scott Morrison said.
Companies that invest through a registered business and are not self-funded can use a “double-taxation scheme”, where the company has to pay both the tax on the capital gain it is entitled to, as well as the tax that would have been paid if the profit had been reinvested.
That would mean if a company bought back shares, it would pay the tax it would have paid on the investment if the profits had been returned to shareholders.
The government also said it would make it easier for small businesses to buy equity stakes in shares.
It will make it harder for companies, through an independent register, to buy and sell shares in small businesses.