personal services income for companies

I'm reading ATO's "Personal Services Income for Companies, Partnerships and Trusts". It says:" the PSI your business received will need to be attributed the people who performed the services (that is, the profits can't be retained in the business).

My questions are:

Can a company retain some money for business (cash flow)?

Thanks in advance.

 

The purpose to ask this question is that if I need cash for business in July, if the company has to distribute all the money to me before the 30th June then I have to use my personal post-tax money to run the business in July. It's bit ridiculous and doesn't make sense.

 

Hi Chris,

I don't have any experience in this area, but think the income is only attributed to the person for tax reasons. The company actually earns the income but the ATO takes the person to have earned it and taxes that person.

 

Thanks Terry.

Surely if the company keeps some money the company will have to pay 30% tax. Now the problem is whether ATO would consider this as "tax avoidance".