TKEG Expat ™ (CH) Australia Corporate Tax Guide

In Australia, the corporate income tax (CIT) rate is generally 30%, with a reduced rate of 25% for small to medium businesses. CIT returns are due on the 15th day of the seventh month following the end of the income year. The final payment for CIT is due on the first day of the sixth month after the income year ends. Estimated CIT payments can be made either monthly or quarterly.

Australia's Goods and Services Tax (GST) is levied at a rate of 10% by the Federal Government and applies to most goods and services, with the revenue distributed to state governments. It is a value-added tax (VAT) where registered suppliers can claim credits for GST on inputs used to produce taxable supplies. Some items, such as food (with exceptions), exports, and most health, medical, and educational supplies, are GST-free, meaning they are not subject to GST but allow recovery of input tax credits. Residential rents, financial supplies, and certain other supplies are input-taxed (exempt), meaning they are not subject to GST, but input tax credits cannot be recovered. GST also applies to cross-border digital products and services supplied to Australian consumers, requiring non-resident suppliers to register and remit GST. Low-value goods imported into Australia by consumers are also subject to GST. Special provisions ensure no double taxation on digital currencies and ease compliance for non-resident businesses by limiting unnecessary involvement in the GST system.

The Australian Federal Government levies a Fringe Benefits Tax (FBT) on employers at a rate of 47% on the grossed-up value of non-salary benefits provided to employees or their associates. FBT ensures neutrality between benefits and cash remuneration and is generally deductible for income tax purposes. There are exemptions for certain minor benefits, remote area housing, specified relocation costs, and COVID-19 tests. Additionally, car fringe benefits for zero or low-emissions vehicles are exempt if the vehicle was first used after July 1, 2022, and valued below the luxury car tax threshold. Starting April 2025, plug-in hybrid vehicles will no longer be considered low-emission under FBT law. Concessional valuation rules also apply to motor vehicles and some living-away-from-home benefits.

The Australian Federal Government imposes a Wine Equalisation Tax (WET) at the wholesale level, set at 29% of the price, in addition to the 10% GST, which is calculated on the price inclusive of WET. This tax applies to wine produced from grapes, fruit, certain vegetables, mead, and sake. Retailers are not entitled to claim an input tax credit for WET. However, wine producers can claim a rebate of 29% of the wholesale price (excluding WET and GST) on wholesale sales, or 29% of the notional wholesale price for retail sales or personal use, with a maximum rebate of AUD 350,000.

The Australian Federal Government imposes a Luxury Car Tax (LCT) at a rate of 33% on the value of vehicles that exceed the luxury car tax thresholds. For the 2024/25 financial year, the threshold is AUD 91,387 for fuel-efficient vehicles and AUD 80,567 for other vehicles. The tax is calculated on the GST-exclusive value above the threshold, and no input tax credits are available for LCT, whatever purpose.