Fact File

Some tax, legal, business and accounting facts.

  1. Corporate tax and GST is only levied at the Federal level but states levy stamp duty
  2. Australia has a GST system – a VAT-based tax
  3. Australia taxes non-residents on the gain on sale of shares in Australian companies if the shares have been held less than 12 months or the underlying company is land rich, i.e., predominantly holds Australian real estateA director of an Australian company must be a natural person (a company may not be a director)
  4. All Australian companies need at least one director who is ‘ordinarily resident’ in Australia
  5. Australia is a common law jurisdiction so its legal system closely resembles that of the UK, Canada, India and 60-70 other common law countries
  6. ASIC = Australian Securities & Investments Commission – it administers various laws, including the Corporations Act 2001
  7. ASIC is the body that registers Australian companies and branches
  8. Australia has several types of company – the common ones being the Pty Ltd (Proprietary Limited, private limited company) and Ltd (Limited, the public limited company)
  9. The private company need only have one shareholder
  10. The tax year commences on 01 July but another date can be chosen under certain circumstances
  11. Stamp duty is no longer payable on the transfer of shares
  12. FIRB = The Foreign Investment Review Board – approval must be obtained from the FIRB for certain investments in Australia
  13. Australian companies can derive tax exempt income, for example dividends from foreign subsidiaries and profits from foreign branches can be exempt
  14. Australia has a 30% dividend withholding tax but it may well be nil
  15. Dividends are exempt from withholding tax if paid out of income that has been taxed in Australia (‘franked dividends’)
  16. Tax losses can be carried forward indefinitely
  17.  Australia treats payments for the lease of equipment – such as an oil rig or a jumbo jet – as a royalty (as do many other countries including, for example, South Africa, Brazil and Poland)
  18. Royalties are subject to withholding tax at a rate of 30%, but this is reduced by tax treaties
  19. Australia does not levy withholding tax on management or technical service fees
  20. The unemployment rate is 5%
  21. The public debt is 22% of GDP
  22. The value of direct foreign investment in Australia is AUD / USD 330 bn
  23. According to Reporters Without Borders, press freedom in Australia is ranked 18th in the world (ahead of the UK and the US).
  24. A wholly-owned group of Australian companies can be grouped for tax purposes (similar to tax consolidation, fiscal unity, etc., as exists in about 40 other countries)
  25. Your company will have an ABN and an ACN. ABN = Australian Business Number – relevant for taxation. ACN = Australian Company Number – a nine-digit identification number required for each Australian company.
  26. It may be that you succeed in registering your preferred company name with ASIC, but the company may still be liable to pay damages if this name contravenes a registered trade mark.
  27. ATMOSS = Australian Trade Marks Online Search System
  28. Australia has many business forms, including various forms of trusts and partnerhips
  29. RBA = Reserve Bank of Australia – is the national or central bank, not to be confused with two of the four major Australian banks, the Commonwealth Bank of Australia and the National Australia Bank, both being publicly listed commercial banks
  30. The Commonwealth Bank of Australia did in fact once have the central bank role at the same time as it was a commercial bank
  31. The four major Australian banks are in the top 12 largest banks in the world; they are in effect forbidden to merge with each other
  32. APRA = Australian Prudential Regulation Authority – the body which supervises banks and other financial institutions; this is not done by the RBA
  33. The Pty Ltd (Proprietary Limited, private limited company) is broadly similar to the UK Limited, the Dutch BV, the German GmbH, the Brazilian Ltda, the French Sarl, etc
  34. The Ltd (Limited, public limited company) is broadly similar to the UK PLC (not to the UK Limited), the Dutch NV, the German AG, the Brazilian SA and the French SA.
  35. A company with share capital might also be an unlimited company or a no liability company. A company limited by guarantee has no share capital; these entities will be more familiar to persons in common law jurisdictions than in civil law jurisdictions
  36. Different rules apply to small and to large proprietary (Pty Ltd) companies
  37. Australians typically provide for retirment by contributing to a ‘superannuation fund’
  38. It is common for Australians to manage their own ‘super fund’, (‘self-managed super funds’) allowing them to decide how their fund invests
  39. Self-managed super funds have assets of more than USD / AUD 400 billion of a total in all superfund assets of 1.3 trillion (January 2011)
  40. ACCC = Australian Competition and Consumer Commission – the body that controls competition; it can prevent a planned takeover
  41. Cash rate, an important Australian bench mark rate: currently 2.75% (since 07 May 2013); set by the RBA; monetary policy decisions are expressed in terms of a target for the cash rate, which is the overnight money market interest rate
  42. Inflation: 3.6%, representing an increase since last official figures  (there is debate as to how much the recent increases in banana prices have caused this higher rate)
  43. Unemployment: 5.6% in March 2013; since 1978 the highest was 10.90 (December 1992) and the lowest was 4.0% (February 2008)
  44. Every Australian company or branch needs a ‘public officer’, who is personally liable for tax and must be a resident of Australia
  45. AUD rate (July 2013)  1 AUD = USD 0.92 cents

Any questions, any comments – just let us know:  Contact us at info@StartingInAustralia.com.au