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    21 views16 pages

    Au Company PDF

    Uploaded by

    Angela Dc

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    of 16
    - WE | Worse Tax Summaries Australia Corporate - Significant developments ‘The following temporary economic stimulus measures introduced as part ofthe Faderal Government's economic response to COVID-19 are due to expire soon: + Business with aggregated turnover of up tS bilion Australian dollars (AUD) have the choice to claim an immediate tax deduction forthe cost ‘of an eligible depreciating asset fist held and installed ready for use by 30 June 2023, See the Deductions section for more information. + Atemporary los eamyback measure can be chosen by companies with an aggregated tumover of less than AUD 5 bition that have tax losses incured in the 2019/20, 2020/21, 2021/22, and/or 2022/23 income years for afset against taxed profits from the 2018/19 or later income years, Seo the Deductions section for more information Employer-provided zero or ow emissions veheles wth a valve at ist etal sale below the luxury car ax treshold for fuel-efficient vehicles are no longer subject to ringe benefits tax where provied from 1 July 2022. Furthermore, trom 1 July 2022, there is no customs duty on elect vehicles, plug-in hybrid vehicles and hydrogen ful-callvercles with a customs value less tan the fuel-efcient hxury car tax threshold, See the Other taxes "ction for mors information. Under the superannuation quarartee (SG) scheme, which requires employers to contribute a certain percentage of an employee's eamings base, ‘subject to limited exceptions, to a registered euperanuation fund or retirement savings account on benalf othe employee, the required SG percentage has increased 10.5% fom 1 aly 2022 ancl wil remain so untl 0 June 2028 at wien time it wil increass to 11%. See the Other taxes ection for more information. The stale of Victoria has a windfall gan tax that applies tothe increase in te value of land in Victor that results from a rezoning that takes effect ‘nr after 1 July 2028. See the Other taxes section for more informatio. ‘Australia has a new free trade agreement with India that enters into force on 28 December 2022 and the agreement with the Urited Kingdom is ‘expected to be implemented soon. See the Other taxes section for mors information ‘The Australian government plans to enter into mary’ new and updated tax treates in 2029, with anew treaty with Iceland signed on 12 October 2022. ‘See the Withholding taxes section for more information. ‘Anew tax ard regulatory framework to support a corporate collective investment vehicle (CCIM) now applies with eect from 1 July 2022. In broad terms, a CIV i a type of company thats limited by shares ang used for funds management and i taxed ona flow-through basi, With the change of federal goverment in May 2022, the following tax measures affecting mult tationals are yet to be implemented: ‘+ The Organisation for Economic Co-operation and Development's (OECD's) Two-Pilar Solution to address the tax challenges of digitalsation of the economy. Effective for income years commencing on or ater 1 July 2023, replace the thin capitalsation safe harbour method applicable fo nor-francial entities with anew test to mit debt-elated deductions to 30% of profs (EBITDAY, replace the existing worldwide gearing test wth anew ‘earrings based group-ratio rule and limit the use ofthe arm's length debt test to extemal (third party) debt. See the Group taxation section for ‘more infomation + Deny deductions for payments made from 1 July 2023 to related paris that relate to intangbles held ina low or no-tax jrsclction. See the {Group taxation section for more information Greater tax transparency measures, See the Other issues section for more information. Corporate - Taxes on corporate income ‘Companies, other than those that ually as a CCIV (see below), that are residents of Australia are subject to Australian income taxon thelr worldwide incame, Generally, non-resident companies are subject to Austalan income tax on Austalan-soureed income ony, However, where a ‘company is resicent na country with whch Australia has concluded a double taxation agreement (OTA), Australia's ight to tax business profits is ‘general liited to profits atvibutable toa permanent establishment (PE) in Austral ‘Al companies are subject to federal tax rate of 80% on tel taxable income, except for ‘small or medium business’ companies, which are subject to. reduced tax rate of 25%, The reduced tax rate applies only to those companies tha, together wih certain ‘corrected erties, fall below the aggragated turnover threshold of AUD 60 milion, Integrty measures also ensure that a compary will not qualify fo the reduced rate unless the specifically defied passive income fncluding, among ‘other things, intrest, rent, and net capital gain) that derives represents no more than AD% oft total assessable incame forthe year, ‘Annow tax and regulatory framework applies rom 1 July 2022 to corporate collective investment vehicles (CCW. In general terms, a CCIVis a new typo ofa company limited by shares thats used fr funds management and for which the tax kw apps to ensure that the income and gains ofthe entity are taxed on a flow-through basis tothe investors. Local income taxes ‘There are no state or municipal taxes on income in Australia, Corporate - Corporate residence ‘A company i a resident of Australia for income tax purposes tit i incorporated in Australia or, not incorporated in Australia, it carries on business in Australa and ether () ts central management and contol are in Australia (CMC tes) or its voting power is controled by shareholers who are residants of Australia Guidance from the Australian Taxation Ofce (ATO) has indicated that fa foreign incorporated company caries on a business and has fs central managomont an control in Australia, it wil any on Business in Australia withthe maaning ofthe CMAC test of resiéancy, eventhough no part of the actual tading or investment operations othe business take places in Australia. However, the previous government proposed amendments tothe ‘existing legiaition to carly the position so that a foreign meorporated company only willbe treated as an Australian tax resident has a ‘significant aconomic connection to Austral. There has been a change of government since th's was fist announced, and it remain unclear ‘whether this proposal wil proceed. If the measure enacted as originally announced, this test will be satisfied where both the company's core ‘commercial activities are undertaken in Australia and is certral management and coriolis in Australia. The measure, if enacted as propased, will have otfect from the fst income yoar after the enabling lgislation is enacted; howover, taxpayers wl havo tho option of applying the now law fom 3 March 2017. Permanent establishment (PE) The concept of aPE is established in both domestic law and various DTS that have been conclided whh Australia, Where a company is resident in ‘a county with which Australia has a DTA, itis important to have regard tothe definition of PE contained therein as this will generally apply in pviorty to the domestic aw. Broadly, under Australia’s domestic la, @ PE fs a place at or though which a person carries on any business, and includes: ‘+ Aplace where the person is canying on business through an agent (except where the agent does nat have, or does not habitually exercise, @ ‘general authority to negotiate and conehide contracts on behalf ofthe pereor + Aplace where the person has, is using ois instaling substantial equipment or substantal machinery + Aplace where the person is engaged ina construction contract. + Where te person fs engaged in saling goods mantfactured, assembled, processed, packed, or distributed by anther person fo, or at orto the order o, the fist-mentioned person and either of those persons participates inthe management, contol, or capital of the other person oF the goods are manufactured, “another person participates in the management, contal, or eaptal of both of those persons, the place wher assembled, processed, packed, or cistibuted. Most DTAs contain a definition of PE that sma, though not idertical, to the defition under domestic law. Corporate - Other taxes Goods and services tax (GST) ‘The Federal Government vies GST at arate of 10% and diatrbutes the revenue to state governments, The GST isa value-added tax (VAT) applied at each love inthe manufacturing and marketing chain and apples to most goods and services, with registered suppliers goting crodits for GST on inputs acquired to make taxable supplies, Food, with some significant exceptions; exoorts; most nealth, medical, anc acucational supplies; and some other supplies are ‘GST-frea! (the ‘equivalent of 'zeo-rated' in other VAT jurisdictions) and s0 not subject to GST. A registered supplier of a GST-free supply can recover relevant input tax credits, though the supply isnot taxable Residential rent, the escond o ater supply of residential premises, most fancal supplies, and some other supplies are input-taxed' (exempt in ‘other VAT jursdtions) and are not subject to GST. However, the suppl cannot recover relevant input tax credits, except that fhhancal suppers may obtain a racuced input fax crait of 75% of tne GST on the acquisition of certain services Heath insurance is GST-ree. Life Insurance is Input-taxed. General insurance is taxed. Reverse charges may apply to services or rights supplied from offshore, where the recipient is registered or required to be registered, and uses the supply solely or paly for anon-credtable supply. GSTs appleable to cross-border supples of digital products ard services imported by Austalan consumers. Ths measure ensures that sia products and other imported services supplied to Australian consumers by foreign enttes are subject tothe GST. Non-resident suppliers are required to register, colet, and remit GST on the cial products and services that they prove to Australian consumers, The way Australia's GST rules aonly to all cross-border supplies tha involve non-resident entities operate to ensure that non-resident businesses do not have to engage in Australia's GST system unnecessariy. This includes swrtching of the GST lability for certain supplies between non-resients and extending the GST-tee rules to certain supplies made to non-residents. There is no double taxation of digital currencies by ensuring that supplies of digital currency receive equivalent GST lreatment to supplies of money {GSTis payable on certain supplies of low-value goods (valued at AUD 1,000 or less) that are purchased by consumers and are imported into Australia - Wine equalisation tax (WET) “The Federal Government vies WET atthe wholesale level at a rate of 29%, in action to 10% GST, which fs caleulated onthe price inclusing the WET, and it apes to wine from grapes, fut and certain vegetables, mead, and sake. Reales do rot recelve an input tax erect for WET. A rebate is available to a wine producer of 29% ofthe wholesale price (exchiding WET of GST) for wholesale sales, and of 29% ofthe notional wholesale seling pice for etal sales and applications for own use (up to a maximum rebate of AUD 350,000) Luxury car tax ‘The luxury car taxis levied by the Federal Government at the rate of $3% ofthe value of the car that exceeds the luxury car tax threshold (AUD 84916 [79,659] for fuel-efficient vehicles and AUD 71,849 [69,182] or other vehicles in the 2022/23 2021/22) fnancal yea) and ie payable on the GST-exclusive value above the threshold, No input tax cred fs available for haury car tx, regardless of whether the cat is used for business of private purposes. Customs duties Imports inte Australia are subject to dutas under the Australian Customs Tarif unless an exemption applies. The top duty rate is 8% From 1 July 2022, there is no customs duty on electric vehicles, plug-in hybrid vehicles and hydrogen fuel-cell vehicles with customs value less ‘tan the fue-officont axury car tax threshold (see above), ‘Australa curently has comprehensive tree trade agreements with Chie, China, Hong Korg, Japan, Indonesia, Korea, Malaysia, New Zealand, Peru, ‘Singapore, Thailand, and the Unites States. Australia's tee trade agreement with Inia enters into force on 29 December 2022 and the agreement ‘with the United Kingdom is expected to be implemented soon. Ih aditon, there i an ASEAN-Ausvalia-New Zealand Free Trade Area (AANZFTA) betviaen ASEAN member states (rune! Darussalam, Cambodia, Indonesia, Las, Malaysia, Myanmar, the Philppies, Singapore, Thaland, ang Vietnam), Australia, and New Zealand and a Comprehensive and Progressive Agreement fr Trans-Pacific Partnership (GPTPP) between Ausra, Brunei Darusselam, Canada, Chile, Japan, Malaysia, Mexico, New Zealang, Peru, Singapore, and Vietnam, A reginal comprehensive economic partnership free trade agree’ent also operates between Ausivaia, New Zealand, and Southeast Asian nations (Brunel Darussalam, Cambodia, ‘China, Japan, Laos, Malaysia, Myanmar, the Prippines, Republic of Korea, Singapore, Talland, ard Vietnam). A Pace Agreement on Closer Economic Relations Pus, which isa regional development-centred trade agreement between Australia, New Zealand, and nine Pacific istand ‘counties (Cook Islands, Kat, Nauru, Niue, Samoa, Soloman Islands, Tonga, Tuvalu, ard Vanuatu) also applies. Negotiations are also underway with the European Union, the Gulf Cooperation Counc: counties (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE) Excise duties [Excise ditles are imposed at high levels on beer, spits, laveurs, tobacco, clgaretes, and petroleum products, Excise rates for tobacco, alcohol ‘and fuel ar indexes annually based on movements inthe consumer price index (CP). Some examples of curent excise rates include: + Boer not exceeding 3% by volume o alcohol packaged in an individual container not exceeding 48 Hes: AUD 47.86 per tre of aleabol ‘calculated on that aleohol content by which the percentage by volume of alcohol ofthe goods exceeds 1.15. + Tobacco in stick form not excosding in weight 0.8 grams per slick of actual tobacco content: AUD 1.14040 per stick + Petroleum condensate, crude petroleum ol, and diesel: AUD 0.46 per live + Liquefiod petroloum gas (LPG), other than LPG exempted from excise duty: AUD 0.18 por lve ‘A fuel tax credit system provides a crecit for fuel tax (excise or customs duty that is included inthe price of taxable fue. Broadly, creaits are ‘valle to enties using fuel in their business and to households using fue for domestic electricity generation and heating Land tax All states and tenitries except the Northern Territory) mpose a tax based on the unimproved capital value of land. In general, the principal place of residence and land used for primary production is exempt rom land tax. Many states also have a land tax surcharge regime for foreign/absentee owners. The state of Victoria also imposes an annual 1% vacant residential land tax onthe capital improved valve of certaln vacant land. ‘Adeitional, the stat of Victoria has a windfall gains tax that applies to the increas in value of land in Vietria resulting from a rezoning that takos ‘\tfect on oF attr 1 July 2028, subject to certain transitional arangomonts. When the taxable value uplift of ll land owed by an owner or group resulting trom the same rezoning is between AUD 100,000 and AUD 500,000, the taxis calculated at a rate of 62.5% onthe uplift in excess of AUD 100,000. For taxable value upitts exceeding AUD 500,000, the taxis calculated ata rate of 50% onthe whole uplift. Stamp duty [All statos and tortoris impose a slaryp duty on a wide varoty of transactions at diferent rates. ll jursdictions impose a stamp duty on real estate ‘convayances, bul most exempt conveyances of goods (not associated with other propery fram stamp duly. The Imposition of duty on share trates involving unlisted entities difers from state to state, Corporate reconstruction exemptions are avalable, The New South Wales government exempts from stamp duly the purchase of new or used battery electric and hydrogen fuel cel vehicles tat cost up to AUD 78,000 (dale value that are registered from 15 August 2022. [Advice from a stamp duty spacial should usually be obtained where substantial stamp duty may be imposed because the amount of duty may {depend on the form of the transaction Environmental taxes ‘Astrala does not impose a taxon carbon emissions or have an emissions trading scheme. However, there the Clean Energy Regulator, who can issue Australian Carbon Credit Units (ACCUs) for greenhouse gas abatement activites undertaken as part of the Australian government's Emissions Reduction Fund, Each ACCU represents one tonne of cardon doxide equivalent net abatement (through either emisions reductions or carbon ‘sequostraion)achioved by sigise activities. ACCUs that nave not been surrendered, cancelled or relinquished can be waded. Some states and local government agencies in Australia may impose waste levies. Since 1 July 2021, the state of Victoria has a road-user charge ‘hat applies to Vieloran registered zero and low-omission vehicles. ‘Australia imposes Federal excise duty on a numberof fuel ard petroleum products with fuel tax credit system in place (see above). Discrete tax concessions related to environmental matters have been enacted. For example, a concessional WHT rate of 10% can apply to

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