1.Australia’s Corporate Tax Framework and System
• Tax System Composition:
Australian tax regulations are established by the federal government, implemented by the Treasury Department, and administered by the Taxation Office. The system is based on direct taxation, with a dual-level tax structure involving both federal and state governments. Additionally, the federal government withholds 9.5% of employees’ wages as pension contributions, which are deposited into employees’ pension accounts.
• Taxes Imposed:
① Federal Government Taxes on Businesses: Corporate income tax, customs duties, value-added tax (VAT), fringe benefits tax, goods and services tax (GST), and others.
② State Government Taxes: Financial institutions tax, debt tax, land tax, payroll tax, stamp duty, transaction tax for certain business dealings, and others.
• Tax Filing Deadlines:
① Personal Tax Filing: From July 1st to October 31st, individuals complete their tax filings independently. If they hire an accountant, the deadline is extended to March 31st of the following year.
② Business Tax Filing: Small businesses with annual revenue below 10 million AUD file taxes quarterly, while larger businesses must file monthly. Quarterly tax reports are due by the 28th of the month following the end of each quarter, while annual tax reports are due by October 28th each year. If submitted via an agency, the deadline may be extended by about one month.
2. Main Taxes Businesses Must Pay and Their Rates
• Personal Income Tax Rates:
① Family annual income 0–18,200 AUD: Tax rate 0%.
② Family annual income 18,201–45,000 AUD: Tax rate 19%.
③ Family annual income 45,001–120,000 AUD: Tax rate 32.5%.
④ Family annual income 120,001–180,000 AUD: Tax rate 37%.
⑤ Family annual income over 180,001 AUD: Tax rate 45%.
• Corporate Income Tax Rates:
①Australian domestic companies, including those registered in Australia, with operational and decision-making centers in Australia, or those controlled by Australian residents, are required to pay corporate income tax on global taxable income (including net capital gains). The fixed tax rate is 30%.
② Small businesses with annual revenue below 50 million AUD benefit from a reduced tax rate. After the 2018/2019 fiscal year, the limit remains at 50 million AUD, with the tax rate for fiscal years 2023/2024 set at 27.5%; the rate will decrease to 27%, 26%, and 25% in the fiscal years 2024/2025, 2025/2026, and 2026/2027, respectively.
• Goods and Services Tax (GST) Rate:
Similar to VAT, low-value imports are exempt from GST, but goods exceeding 1,000 AUD, along with all tobacco and alcoholic beverages, are subject to GST. The GST rate in Australia is 10%.
• Stamp Duty Rate:
Stamp duty is imposed by state and territory governments on property buyers, generally at a rate of around 4% of the property’s value.
• Digital Services Tax (DST) Explanation:
In March 2019, the 40th Australian Parliament decided not to support the digital services tax (DST) proposal discussed at the G20 meeting, favoring multilateral discussions instead.
• Carbon Emissions Tax Explanation:
After years of debate, the Australian Labor Party’s Gillard government introduced the Clean Energy Act in 2012, imposing a carbon tax of 23 AUD per ton on around 300 heavy-polluting companies, which was supported by environmentalists but protested by the public. In July 2014, the Australian Senate voted to
abolish this law by 39 votes to 32, making Australia the first developed country to abolish the carbon tax. However, after the Labor Party returned to power in 2022, discussions about reintroducing the carbon tax have been ongoing.
3. Materials Required for Applying for Foreign Investment Registration in Australia
• A chart of the investment entity’s ownership structure, showing the ultimate actual controller (including copies of the identification documents for individual shareholders and copies of business licenses for corporate shareholders).
• Legally effective investment contracts or relevant documents.
• Legal registration documents and constitutional documents of the investment entity.
• The most recent financial audit report of the investment entity.
• Supporting documents proving the legality of the investment source.
• Investment decision-making documents of the investment entity.
• Overview of preliminary project work, including due diligence, feasibility studies, investment environment analysis, etc.
Australia’s corporate tax framework is complex, involving various taxes imposed by both federal and state governments. The main taxes and their rates vary. In addition, applying for overseas investment registration requires submitting materials such as ownership structures, contracts, and registration proofs. When entering the Australian market, investors must thoroughly understand the local tax system and tax rates, plan tax strategies scientifically to reduce the tax burden, and ensure that all necessary documents for overseas investment registration are complete. It is also essential to stay informed about policy changes, carefully assess investment risks, and conduct comprehensive due diligence and feasibility studies to make more precise and forward-looking investment decisions.
