Taxes have always been a part of our lives. It is the amount of money that is imposed by the government to the people which is used for public purposes. There are different taxes imposed on everyone. For instance, a business owner pays different kind of tax compared to office workers, and so on.
In Australia, there are actually 3 types of business taxes imposed by the government. These taxes are submitted to the Australian Taxation Office or ATO in due time. If you’re unfamiliar with these kinds of business taxes, this quick guide will give you a short overview about the three main business taxes in Australia.
Company Tax
Company or Income Tax is the tax imposed by the authority to any company in Australia. This tax can vary under certain circumstances. Australian resident companies need to pay this tax according to their income and at a rate that is set by the government.
On the other hand, a non-resident company is charged based only on their Australian source income. The rate being charged is the same with resident companies. Aside from the amount of their income, the amount of company tax charged also varies with business type and structure.
Capital Gains Tax
Capital Gains Tax is a part of company or income tax. This kind of tax is calculated based on the gains a company makes by disposal of assets. Both resident and non-resident companies should always keep a record of the assets that they acquire through time.
These documents are essential in computing the CGT payable by the company. For foreign companies, the assets that they have acquired and disposed while doing business in the country is the only one subjected to CGT. This tax may also be charged on small businesses if they have met the certain conditions needed.
Goods and Services Tax
Goods and Services Tax is an overall tax for goods and services that are consumed or sold in the country. If you own a company selling goods or offering services, it is required that you register your business for this kind of tax. As long as you meet the general requirements, registering is just an easy process. You can register for GST online, through the phone, via a registered agent, or even through a business portal. As long as your business meets the threshold rate, you need to register it within 21 days.
Payroll Tax
Although it is not included in common business taxes, payroll tax is still a part of running a business. It is the tax charged based on the overall wages you pay to your employees. The rate and exemption threshold for this tax varies across different states in the country so it is recommended that you check the tax laws first to stay informed.
Although there are still other forms of taxes out there, those 3 are the most common taxes charged for business in Australia whether they are resident or non-resident companies.
