The corporate tax on companies with an annual turnover of less than AUD 50 million is 27.5%, and for companies with an annual turnover more significant than AUD 50 million, it is 30%. Clearly, it concerns very large amounts of money, and going through the process of commercial taxation involves a lot of careful work. It is a subject matter that must be thoroughly examined and understood to run a business successfully.
When considering all the taxation that has an impact on your business, many components of it emerge, such as:
1. The Goods and Services Tax (GST)
In Australia, the standard GST rate is 10%. If your business has a GST turnover of AUD 75,000, it must be registered, and returns must be filed quarterly. If the GST turnover is AUD 20 million or more, returns are filed monthly.
2. The Australian Payroll Tax
For every person employed, business owners must pay 9.5% of their gross salary to the social security and unemployment insurance fund, be it as a trust or as a sole trader. Fringe benefits that are provided to employees are taxed at a rate of 46%. Employers are also required to withhold a payroll tax that is due on workers’ wages at an average of 5.5% (depends on the local authority).
3. Withholding Tax
For foreigners that invest in Australia, the good news is that subsidiary business that pay dividends to parent companies are exempt from withholding tax.
4. Corporate taxation transparency
Companies that earn more than AUD 100 million annually must publish an annual report containing income figures.
Clearly, tax legislation is complicated, and hiring the help of a professional such as a tax accountant from Wetherill Park can make it less hectic for you!