Australia`s tax law is federal law and is enforced by the Federal government Treasury. The main taxes levied by the federal government are income tax (including capital gain tax and employee welfare tax), sales tax, tariff, domestic tax, and bank account loan tax. Income tax is the main source of government revenue. The taxes levied by the state government are stamp duty, land tax, payroll tax and transaction tax for certain commercial transactions.
[经] obligation of tax
Australian residents are required to pay taxes on income from all their sources. Non-residents are required to pay taxes on income from Australia.
[经] financial yea
Australia`s fiscal year is from July 1 to June 30 of the following year. Foreign companies and their subsidiaries are also allowed to file tax returns in accordance with the domestic financial year.
[经] agency-in-charge
The competent authority responsible for income tax collection is the Australian Taxation Authority.
Various taxes
income tax
Income tax is divided into two aspects: business income tax and personal income tax.
[财]business income tax
Companies incorporated in Australia shall, in accordance with the law, pay taxes on income from all their sources, whether from within or outside Australia. Generally speaking, corporate income tax is levied on its net income. In addition to the income from business, the profits earned by the company from buying and selling assets are also taxable. The company also has to pay capital gains tax and employee welfare tax. The rate of corporate income tax is now 30%. When the loss of the company is insufficient in the current year, it can be offset from the future income of the company. There is no limit on the number of years of this deduction.
[经] income tax for individuals
Australian residents pay taxes on their income from all sources, including income within and outside Australia, while non-residents pay taxes on their income in Australia.
The personal income tax rate is different from that of non-residents, with income tax ranging from zero to 47%. In addition to some low-income taxpayer, taxpayers are required to pay 1.5 per cent of health insurance premiums to Australian government. The income tax rate for non-residents ranges from 29% to 47%. Australian government constantly adjusts the starting point and tax rate of tax rates at all levels according to economic development and taxpayer revenue. The updated tax policy has been in effect since July 1, 2005. Since July 1, 2005, the annual income tax rate of A $6001 to A $21600 has fallen from 17 per cent to 15 per cent; the starting point for the 42 per cent tax rate has been raised from A $58001 to A $63001; and the starting point for 47 per cent has been raised from A $70001 to A $95001. From July 1, 2006, 42 per cent of the starting point will be raised to A $70001; 47 per cent of the starting point will be raised to A $125001.
interest with holding tax
If an Australian company receives a loan from a non-Australian resident, interest paid to that non-Australian resident shall be subject to a 10% interest withholding tax in Australia.
[经] capital gains tax
Also known as property transaction tax. Australian tax law stipulates that assets purchased after September 19, 1985 shall be subject to capital gains tax on proceeds from sale.
Dividend income
Australia levies taxes on dividend income from July 1, 1987. Shareholders may be deducted from the income tax paid by the company on the income. However, if the shareholder is a foreign company, if it has been proved that the income tax has been paid, the foreign shareholder will not have to pay the withholding tax, but if the income tax is not paid, the foreign shareholder will have to bear the withholding tax.
Australia`s treaty to avoid double taxation with China`s government puts the withholding tax at 15 per cent.
[经] tax on sales
Sales tax is a tax on goods sold or imported wholesale. Taxable goods, including goods manufactured in Australia or imported from Australia. Law stipulates that manufacturers and wholesalers should register with tax authorities to obtain sales tax numbers. However, if the importer himself is not a manufacturer or wholesaler, he shall not register, but shall still pay a sales tax on imported goods in accordance with the law.
stamp duty
Stamp duty belongs to state tax, all loan mortgage, securities trading, real estate trading and so on should pay stamp duty. Because it belongs to the state law, the regulations vary from state to state. Generally speaking, a transaction subject to stamp duty in accordance with the law shall not take effect until it is paid.
[法] land tax
Land tax is a state tax, and landowners pay land tax according to the value of their land. In the new state, the land tax rate is 1.85%, and land worth more than A $176,000 is payable.
GST tax system
GST represents GOODS & SERVICES TAX (goods and Services tax, similar to VAT (VALUE ADDED TAX) value added tax in other countries. The Federal parliament of Australia passed a new regulation on June 29, 1999. From July 1, 2000, it introduced a new tax system, levying a 10% tax on goods and services.
GST is collected at almost every stage of production and distribution when supplies or services are provided, and the only GST-free item is food. Suppliers and service agencies must be registered with the tax department. The GST they pay for when they purchase goods or services will be offset by GST when they supply or provide services to their customers.
