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The ATO ensures companies are kept in check with their tax obligations by maintaining a thorough compliance program for businesses. Goods & Services Tax Brought into being in 2000, the GST is levied on the sales of goods and services in Australia at a rate of 10%. It is designed to be a end-user tax, as businesses are able to claim back GST credits on the GST they have paid in the period. Most transactions are caught under the tax; with certain exemptions for financial supplies, health goods, fresh foods and council fees.

Income Tax

Income tax for individuals resident in Australia is a based on a bracketed system with the highest tax bracket being 45% (plus an additional 1.5% being for the medicare levy). Companies’ income tax is a flat 30% which is calculated on taxable income. Tax offsets can apply to reduce the tax exposure such the foreign tax paid overseas.

Fringe Benefit Tax

This is directed towards companies which give out non-monetary based benefits for its employees and is not covered under the PAYG system, ie; a private car. The tax rate is 46.5% and also involves a gross-up system.

Payroll Tax

This is levied at a State level and is generally based on the level of wages attributed to that state. Each State jurisdiction has different rates and means of calculating the payroll tax.

Contact Australian Accountants to ensure your company keeps track of its annual tax obligations.