To start a process of Due Diligence in Argentina, it is vital to guarantee the flow of information to reduce risks.

Accounting and tax requirements in Australia for business

Boasting one of the world’s most lucrative and stable economies, and a high GDP per capita, it is little wonder why so many foreign investors choose to start a company in Australia. The country is an economic powerhouse and offers entrepreneurs endless untapped earnings potential. However, like in any other country the books need to be kept in order, so you must understand accounting and tax requirements in Australia.

The country has excellent links with many of the world’s most advanced and lucrative economies through free trade agreements, making Australia’s import and export market one that’s packed with opportunities for significant return on investment. This will take understanding of accounting and tax requirements in Australia. The government can help with this.

In order to capitalize on these opportunities in the market, it is vital that you get to grips with the accounting and tax requirements in Australia. Doing so will enable you to remain compliant and build a business with legs in the country – even if it does take some getting used to. Biz Latin Hub can help guide you through the basics here and for more detailed advice get in touch with us to find out more.

What are the basic accounting and tax requirements in Australia?

If you incorporate a company in Australia, you conduct business in Australia that is managed in the country, or you conduct business in the country have Australian resident shareholders, then your company is considered to be resident in Australia.

Infographic about Accounting and Tax Requirements in Australia. Text: "The Australian tax year runs 1 July to 30 June. Two corporate income tax rates based on annual turnover: 27.5% for turnover less than AU$50 million, 30% for turnover more than AU$50 million." Logos and contact details included.
Accounting and tax requirements in Australia

Companies which are resident are taxed on their worldwide income – that is, income generated in Australia and by trading with other countries around the world. Non-resident companies, on the other hand, are only required to submit accounts and pay tax on their income that was generated in the country.

All companies in Australia are required to pay a corporate tax rate of 27.5%, provided their turnover is less than AU$50 million per year. For those companies with a turnover of more than AU$50 million per year, the full 30% corporate tax rate applies to all taxable income.

For companies with a turnover of more than AU$10 million per year, accounts and returns must be submitted by January 15th after the tax year ends, or February 28th for those who generate less than AU$10 million per year. Ensuring you submit your taxes on time is critical, as you may be fined or asked to appear in front of a judge if you don’t provide the necessary information on this date. Therefore, working with an experienced accountant makes sense.

It’s important to note that you may carry forward your business losses indefinitely. However, you can only carry forward capital losses by offsetting them against capital gains. Ensuring you incorporate under the right Australian business structure, and seeking the assistance of a reputable business accountant, is key to remaining compliant when carrying losses forward.

Informational graphic about Australian Taxation, specifically Goods and Services Tax (GST). It states that the standard GST rate is 10%. All businesses with a turnover of AU$75,000 must register and report quarterly; those over AU$20 million report monthly. Accounting and tax requirements in Australia. BizLatin Hub logo at the bottom.
ccounting and Tax Requirements in Australia include GST

Goods and services tax (GST)

The standard Goods and Services Tax (GST) rate in Australia is 10%. All businesses with a Goods and Services Tax turnover of AU$75,000 must register, and returns should be submitted to the government on a quarterly basis. For businesses generating a turnover of AU$20 million or more, filings should be returned monthly – keeping on top of your finances is critical here.

Australian payroll tax

When taking on employees in Australia, you must be aware of the financial responsibilities of doing so and factor this into operating costs. Employers must pay into the Social Security and Unemployment Insurance Fund at a rate of 9.5% of an employees’ gross salary, whether setting up as a Sole Trader or a Trust, as well as paying an eye-watering 46% tax on fringe benefits provided to workers, whether that be healthcare, gym membership, or childcare. On top of that, employers are expected to withhold payroll tax that is due on all employees’ wages, which averages at around 5.5% depending on the local authority you operate within.

Withholding tax in Australia

When operating in Australia as a foreign investor, it’s important to understand withholding tax and know how to distribute earnings to yourself, other shareholders, and businesses both in and out of Australia. If you run a subsidiary business, then you’ll be pleased to know that dividends paid to Australian and foreign parent companies are withholding tax-exempt, so long as the necessary corporate tax has been paid on profits.

The interest that is paid to foreign entities has a 10% withholding tax, and real estate sales and transfers are subject to a property tax levied by your local authority (this figure can be anything from 4% to 7%).

What is interesting to note, however, is that Australia has taxation treaties with fifty countries around the world, reducing withholding tax on payments abroad. Refer to your local government for more information before you get started.

Corporate tax transparency

In order to create a fair and transparent Australian tax system, the government offers up a lot of information about companies that operate in the country. Indeed, should you incorporate in Australia and create a successful business that generates more than AU$100 million per year, you must be prepared for an annual report to be released, that includes your company name, business number, and income figures (such as taxable income and tax payable). In cases where confidentiality is critical, operating as a subsidiary may be a necessary step.

Informational graphic for those starting a business in Australia. It lists various taxes applicable, such as income tax for business, capital gains tax, PAYG withholding and installments, goods and services tax, and payroll tax. Contact details are included.
Accounting and tax requirements in Australia cover all these and more

FAQs on accounting and tax requirements in Australia

Who is liable for tax in Australia?

If you incorporate a company in Australia, you conduct business in Australia that is managed in the country, or you conduct business in the country have Australian resident shareholders, then your company is considered to be resident in Australia.

Companies which are resident are taxed on their worldwide income – that is, income generated in Australia and by trading with other countries around the world. Non-resident companies, on the other hand, are only required to submit accounts and pay tax on their income that was generated in the country.

What is the corporate tax rate in Australia?

All companies in Australia are required to pay a corporate tax rate of 27.5%, provided their turnover is less than AU$50 million per year. For those companies with a turnover of more than AU$50 million per year, the full 30% corporate tax rate applies to all taxable income.

What is the VAT/sales tax rate in Australia?

The standard Goods and Services Tax (GST) rate in Australia is 10%.

Does Australia have a withholding tax?

Dividends paid to Australian and foreign parent companies are withholding tax-exempt, so long as the necessary corporate tax has been paid on profits. The interest that is paid to foreign entities has a 10% withholding tax.

Do you need to publish annual reports in Australia?

A business that generates more than AU$100 million per year must be prepared for an annual report to be released that includes the company name, business number, and income figures (such as taxable income and tax payable).

Biz Latin Hub can help you with accounting and tax requirements in Australia

If you need assistance in sorting accounts or taxation in Australia, you can depend on the experts at Biz Latin Hub. Our local team is on hand to guide you through the process of incorporating, filing returns, organizing payroll, distributing profits and everything in between, so do not hesitate to contact our Australian experts to find out more about how we can help.

Contact us now and we’ll get back to you soon with a personalized strategy designed to take your business to new heights.

Infographic titled "How Can Our Accounting & Taxation Services Help Your Business?" surrounding the BizLatin Hub logo. It lists services: Bookkeeping, Payroll Processing, Financial Reporting, Invoice Management, Audit & Tax Filing, and Treasury Services. Meeting accounting requirements in Bolivia? Contact us!
Key services offered by Biz Latin Hub include accounting and tax requirements in Australia
The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.
Accounting Team Australia
Accounting Team Australia

Accounting Team Australia is the Biz Latin Hub leading experts on doing business in Australia. The Team writes on the news, doing business, accounting, and changing regulations. The team are experts on auditing, local taxation, international taxation, payroll processing, payroll compliance, IFRS and financial advisory services. Read more about them here. You can contact Accounting Team Australia via our "contact us page".

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