Most major business taxes, such as income tax, are collected by the Australian Government through the Australian Taxation Office (ATO). In some instances state-based taxes also apply, most commonly for payroll tax. Australia also holds a number of tax treaties with other nations to prevent double taxation of foreign entities operating in Australia.
For more information, see the ATO’s Hiring and paying yur 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 will be subject to the conditions of the treaty. There are also some other international tax arrangements that relate to specific industries or topics.
For more information see ATO: International tax agreements.
Businesses can save money by paying the correct amount of tax on time and taking advantage of any tax concessions that 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 elect to make tax payments monthly, quarterly or annually.
An Australian resident company is subject to company tax, at a rate set by the Australian Government. A non-resident company is taxed on its Australian source income at the same rate as a resident company. Taxable income and the tax rate may vary under limited circumstances, such as industry or business structure.
For more information, 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 in carrying on a business in Australia. Businesses are required to 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.
For more information, see business.gov.au: Capital Gains Tax.
The Goods and Services Tax (GST) is a national, broad-based consumer tax on 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.
For more information, 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.
For more information, 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 determine whether they apply in your particular case.
For more information, see business.gov.au: Taxation.
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