KEY FACTORS TAXES THAT AFFECT AUSTRALIAN BUSINESS

 

Different forms of taxes are levied by Australia's federal, state, and territory governments. This summary touches on some of the taxes that affect the business, individual, and foreign entities that invest in Australia.


Taxes in Australia are collected by ATO and in, some cases state revenue offices. Businesses can save money by paying the taxes on time and taking benefit of any tax concessions that they are qualified for.


The taxes concerning businesses are Company Tax, Capital Gains Tax, and the Goods & Services Tax, and others. These Taxes are all set up by the Australian Government. 


Businesses can choose to make tax payments quarterly, monthly, or yearly. 


Further details on these taxes and other business taxes are provided below- 


Company Tax (Income Tax)

Companies are treated as separate Taxpayers in general. An Australian company is set to pay company tax at the rate set by the Australian Government. 

If you're a non-Australian company, you're taxed based on Australian Source Income at the same rate as a resident company. 

For more information, you can visit ATO: Company Tax Rates.


Capital Gains Tax

Assets are subjected to capital gain tax where a taxable event occurs, creating a capital gain or loss. Capital gains are offset against any capital losses or capital gain for the year is included in assessable income. 


Foreign entities may be subjected to CGT on assets acquired and used in carrying on business in Australia. Businesses are required to keep records of assets that are subjected to CGT. 

 

Particular CGT rules are applied if any individual ceases to be resident and foreign residents are recognized to certain Australian assets. 


For more information, you can visit ATO: Capital Gains Tax.


Goods & Service Tax

The GST is a national consumption tax on most goods and services traded or consumed in Australia.

Most businesses need to register for GST with the Australian Taxation Office. The GST payable on supply is calculated as one0-eleventh of the total consideration that the entity receives for making the supply. Exceptions include supplies that are reverse charged and supplies made by a non-resident through resident agents. 


For more details, you can visit ATO: Good & Service Tax.


Payroll Tax

Payroll tax is a territory tax that is lavished at a specified rate by reference to annual wages and salaries of employees that exceed the prescribed threshold amount. Rates in each jurisdiction range from 4.75 % to 6.85%. 

A particular area of difficulty arises with the very broad rules applicable to payments of contractors, and the grouping of employers' companies for aggregation of wages and salaries. 

For more information, you can visit ATO: payroll taxes.


Other Business Taxes

There may be other taxes by the Australian Government and state, and territory government relevant to business activities. These may include taxes such as land tax, fringe benefits tax, custom & excise duty, and multinational tax.  


Businesses and investors must study these taxes to decide whether they apply in particular taxes.

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