Australian company registration and essential tax knowledge-Amber Global Finance

  1. Advantages of Australian registered companies

1.1 No need for registered capital

Companies registered in Australia do not require funding and can be registered directly

1.2 Simple procedures

The registration procedures for Australian companies are relatively simple, with a short approval time and high registration efficiency

1.3 Provide on-site tax consultation services

Both tax authorities and trade bureaus provide comprehensive and free information services

1.4 The Cradle of Technological Entrepreneurship

High tech enterprises are more likely to obtain funds from overseas capital markets, transforming local technology into overseas technology, thus paving the way for overseas capital to enter technology.

1.5 When setting up an office in Australia, most of the expenses can be taxed out of income, including wages, advertising expenses, office rent, air tickets, etc

1.6 Convenient immigration

Establishing a company in Australia is convenient for applying for a business visa, spouses can temporarily reside in Australia, and children can attend Australian government schools; Holding a business visa allows one to apply for a PR (green card) for permanent residency in Australia under certain conditions, thereby successfully immigrating to Australia.

 

  1. Information required for Australian company registration

2.1 Three (English) names of Australian companies to be registered must be in the form of PTY LTD, PTY LIMITED, or PTY End of LTD.

2.2 Personal address and name

2.3 Identity cards or passports of directors and shareholders, and the shareholding ratio of shareholders (at least one director and one shareholder, aged 18 or above).

2.4 Confirm the registered capital (suggest AUD 1000), no actual receipt is required

2.5 Business scope

2.6 Registration completed within 2 months

 

  1. Essential tax knowledge

3.1 TFN, ABN, and GST

For companies established in Australia, there are three tax concepts that need to be taken seriously: TFN, ABN, and GST.

TFN is the Tax File Number, which is a unique identification number assigned by the Australian Taxation Bureau ATO to individuals. It is usually a 9-digit number and is mainly used for managing personal taxes. 

TFN is generally used by employees when the employer needs to withhold personal tax (PAYGW - PAYG with holding tax). At this time, the employee and the boss are in an employment relationship, and employees generally enjoy all the rights of the employee (for example, the boss needs to pay the employee's salary, and if you meet the situation, the boss also needs to pay you pension, annual leave, etc.).

ABN is an Australian Business Number, a unique set of 11 digit numbers that an organization uses to interact with the tax bureau or another organization (such as a company).

When issuing an invoice, an ABN number is usually required. Applying for an ABN number is not mandatory, but if GST (Goods and Services Tax) is required, an ABN number is required. ABN is managed by the Australian Taxation Authority (ATO) and the Australian Business Registration Authority (ABR). 

GST is not directly related to personal direct income.GST can also be deducted. When providing sales revenue in business, it is possible to collect taxes from others and deduct taxes paid when purchasing goods or services from others. The final tax that needs to be paid to the tax bureau, ATO, is: the tax collected from others minus the tax paid on purchasing goods or services. 

In addition, if the annual income does not exceed $75000, it is not necessary to register for GST.

 

3.2 Other taxes

  1. Corporate income tax -27%
  2. Turnover tax (sales tax) -10%
  3. Tariff - minimum 5%, maximum 300%, different tariffs for imported products; Tariffs can offset losses, but cannot participate in tax refunds
  4. Value added tax (GST) -10% of sales revenue
  5. Individual income tax

Resident tax rates 2023–24

Taxable income

Tax on this income

0 – $18,200

Nil

$18,201 – $45,000

19c for each $1 over $18,200

$45,001 – $120,000

$5,092 plus 32.5c for each $1 over $45,000

$120,001 – $180,000

$29,467 plus 37c for each $1 over $120,000

$180,001 and over

$51,667 plus 45c for each $1 over $180,000

The above rates do not include the Medicare levy of 2%.

 

 

  1. Documents required for accounting and tax reporting

  • Registration Certificate
  • Tax Number (TFN)
  • Bank statement
  • Income and expenditure statement
  • Invoice (optional)
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