Corporations
Australia taxes all companies at a flat rate of 30% of net taxable income from all sources both in and out of Australia.
Profits, once taxed, can be left in the company and will bear no further tax.
If profits are paid out to owners, the tax paid by the company is ‘imputed’ to Australian resident shareholders as a tax credit. Where the company does not have sufficient tax credits, dividends will be referred to as unfranked or partly franked. In this case, low or no imputation occurs on the dividend.
Where the shareholder is not resident in Australia, a dividend withholding tax applies on the unfranked portion of the dividend. Withholding tax rates vary between countries, however most are 15%.
Multiple companies in Australia with common ownership can be grouped for income tax purposes.
Tax losses can be carried forward indefinitely where there is continuity of ownership of the Australian company or where the company operates the same business between the loss year and recoupment year.
Thin capitalisation rules apply to Australian companies that have high debt compared to the shareholder’s capital. These rules act to deny a tax deduction on the excess interest.
Other Taxes Goods & Services Tax Work Cover Payroll Tax Superannuation