Most major business taxes, such as income tax, are collected by the Australian Government. This is done through the Australian Taxation Office (ATO). Some state-based taxes may also apply, such as payroll tax. Australia also holds a number of tax treaties with other nations. This stops double taxation of foreign entities operating in Australia.
Income tax is usually paid by workers when they earn money from employment, pensions, government payments, investments, and foreign sources. The amount depends on how much is earned. There may be deductions or offsets that can be claimed.
See the ATO’s hiring and paying your workers.
Tax agreements, or treaties, aim to prevent double taxation and promote cooperation between international tax authorities. Individuals that are legal residents of a treaty country are subject to the conditions of the treaty. There are also some other international tax arrangements that relate to specific industries or topics.
See ATO: International tax agreements.
Businesses can save money by paying the correct amount of tax on time. They may also benefit from tax concessions they are entitled to. Key taxes affecting businesses are Company (income) Tax, Capital Gains Tax (CGT) and the Goods and Services Tax (GST). Businesses can make tax payments monthly, quarterly or annually.
An Australian resident company is subject to company tax. The rate is set by the Australian Government. A non-resident company is taxed on its Australian source income. This is at the same rate as a resident company. Taxable income and the tax rate may vary under limited circumstances. For example, industry or business structure.
See ATO: Company tax rates.
Capital Gains Tax (CGT) applies on any capital gain made through the disposal of assets. It is paid as part of income tax. Foreign entities may be subject to CGT on assets acquired and used for business in Australia. Businesses must keep records upon acquiring assets that may be subject to CGT in the future. Small businesses may also be eligible for CGT concessions under certain circumstances.
See business.gov.au: Capital Gains Tax.
The Goods and Services Tax (GST) is a national, broad-based consumer tax. This is applied to most goods and services sold or consumed in Australia. Most businesses are required to register for GST with the Australian Taxation Office. Businesses which have paid for business supplies inclusive of GST, are entitled to claim an equivalent input tax credit. Certain businesses may also be eligible for GST concessions.
See: ATO, GST.
Payroll tax is a state tax on the wages you pay to employees. The payroll tax exemption threshold and the payroll tax rate varies between states and territories.
See business.gov.au: Payroll Tax.
There may be other Australian Government and state and territory government taxes relevant to certain business activities. Businesses and investors should review these taxes to know whether they apply to your business.
See business.gov.au: Taxation.
Austrade specialists can answer your questions on investing and finding opportunities in the Australian market.