Business in Australia

Taxes, financing

Taxes in Australia

  • No inheritance or estate taxes
  • No tax on dividends
  • GST (VAT) – 10%*
  • Corporate tax – 27.5%

* Companies registered as a GST payee, will have the tax refunded on a quarterly basis, together with any GST paid on imports.

After paying the corporate income tax, foreign investor withdraws any income from Australia without paying any additional taxes.

It is important to keep in mind that there are many tax optimization options in Australia, from trusts to offshore lending arrangements.

When purchasing land plots, a “stamp duty” is paid, which is 2-3% of the total price. The annual land tax, varies by state, but on average is 2-4% of the cadastral value.

Australia uses a progressive tax scale system for the purposes of taxing individuals. Under this system, the rate of tax payable increases as taxable income increases.

Income tax rate ranges from 19% to 45% (for incomes of more than AU$ 180,000 per year).

Financing options in Australia

Project financing in Australia is done through banks or through loan brokerages.

The bank interest rate starts from 3.9% per annum, depending on company track record and history.

Brokerage rates start from 8.5% per annum, and can reach 18%, depending on the stage of the project, existing pre-sales and the type of financing required (mezzanine, stretch, preferred shares, etc.)

Comparative tax table

Country

Tax %

Comments

Germany

31,5%

Federal rate – 15%, other – 5.5%, state tax: 14-17%

USA

25,7%

Federal rate – 21%, state tax: 3 – 12% (44 out of 50 states)

Canada

37,75%

Federal rate: 10-38%, province tax: 11.5-16%

Australia

30%

Concession rate of 27.5% for companies with an annual turnover of less than AU$ 25 million

New Zealand

28%

Fixed rate

Spain

25%

Fixed rate

Poland

19%

Concession rate of 15% for startups in the first year and for small businesses (income including VAT on goods and services less than EUR 1.2 million)

Israel

25%

Fixed rate

Norway

22%

Fixed rate

Czechia

19%

Exception for investment (5%) and pension (0%) funds

Finland

20%

Fixed rate

Italy

24%

Fixed rate; may be increased depending on the region (product tax from 3.9%)

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