Foreigners in Australian Taxation Law: Tax Treatments and Implications
Added on 2022-11-14
10 Pages2693 Words223 Views
|
|
|
TAXATATION LAW 1
Taxation Law
Name
Affiliate Institution
Date
Taxation Law
Name
Affiliate Institution
Date
TAXATATION LAW 2
Definition of foreigners (including businesses) in Australian Taxation Law
Foreign residents are mainly taxed as per the income they are able to earn from their
investments in Australia. Taxes in Australia are mainly administered and collected by the
Australian Tax Office (ATO), in some cases, however, the state government revenue offices can
collect and administer taxes. From time to time, businesses opt to take advantage of the existing
concessions by paying taxes in the correct amounts on time (Kirchner, 2012, pp.410-421). There
are three classes of taxes by the Australian government that affect businesses; these are Company
Tax, Capital Gains Tax (CGT) and the Goods and Services Tax (GST).
Under the company tax, a company that is resident in Australia is subject to the company
tax and is charged at the rate as set by the Australian government (Anon, 2019). For companies
that are non-resident, the taxes applied under company tax is mainly based on the Australian
source of income at the same rate as the company that is resident. However, it should be noted
that the rate of taxation may vary depending on the circumstances such as the type of industry in
which the company is and the business structure of the company (Sheng, Jackson and Gooday,
2015).
Identify the tax treatments which are different to foreigners (comparing with
residents for taxation purpose)
Under the Capital Gains Tax(CGT), any capital gains that are made through any form of
asset disposal is to be paid in the form of income tax, this basically means that the payment will
be as part of the income tax. Capital Gains Tax also applies to the foreign entities and remains as
subject to CGT, this includes the assets that are acquired in Australia and have been used to carry
out business in Australia. Under CGT, the government will require all the businesses that have
Definition of foreigners (including businesses) in Australian Taxation Law
Foreign residents are mainly taxed as per the income they are able to earn from their
investments in Australia. Taxes in Australia are mainly administered and collected by the
Australian Tax Office (ATO), in some cases, however, the state government revenue offices can
collect and administer taxes. From time to time, businesses opt to take advantage of the existing
concessions by paying taxes in the correct amounts on time (Kirchner, 2012, pp.410-421). There
are three classes of taxes by the Australian government that affect businesses; these are Company
Tax, Capital Gains Tax (CGT) and the Goods and Services Tax (GST).
Under the company tax, a company that is resident in Australia is subject to the company
tax and is charged at the rate as set by the Australian government (Anon, 2019). For companies
that are non-resident, the taxes applied under company tax is mainly based on the Australian
source of income at the same rate as the company that is resident. However, it should be noted
that the rate of taxation may vary depending on the circumstances such as the type of industry in
which the company is and the business structure of the company (Sheng, Jackson and Gooday,
2015).
Identify the tax treatments which are different to foreigners (comparing with
residents for taxation purpose)
Under the Capital Gains Tax(CGT), any capital gains that are made through any form of
asset disposal is to be paid in the form of income tax, this basically means that the payment will
be as part of the income tax. Capital Gains Tax also applies to the foreign entities and remains as
subject to CGT, this includes the assets that are acquired in Australia and have been used to carry
out business in Australia. Under CGT, the government will require all the businesses that have
TAXATATION LAW 3
acquired any form of assets in Australia to provide a form of written information and record
pertaining to the acquisition and use of assets. However, small businesses may benefit through
some of the CGT concessions under some circumstances.
Goods and Services Tax(GST) is a form of consumption tax that is administered on most
of the goods and services that are sold and consumed locally in Australia. The Australian
Taxation Office often requires that the businesses are able to register with them. Businesses that
have been able to pay for the business supplies will be entitled to input tax credit and hence some
of the businesses will be eligible to GST concessions. Payroll Tax is a form of tax that is paid as
a result of the wages that are paid to the employees, its basic calculation is based on the amount
of the total wages paid in the course of the month and must be paid in the event that the total
amount exceeds the set threshold for the state or territory of payment (Sheng, Jackson and
Gooday, 2015). This, therefore, means that the payroll tax will vary from one state to another.It
should also be noted that there could exist other forms of business taxes that could be levied
through the Australian government, state and even the territory government based on some form
of business activities. These taxes include those paid as land tax and Fringe Benefits.
Businesses and foreign investors should be able to review these taxes first before
undertaking to apply hence depending on one's case. As a foreign resident in Australia, tax is
generally exempted from any forms of interest, unranked forms of dividends and royalties that
are due to the Australian government. Upon notifying the Australian financial institution of the
existence of your foreign resident status, the tax will be withheld and the time of making the
payment. This means that the foreigner won’t need to make some form of the declaration with
regard to the Australian tax return(Ato.gov.au, 2019). The existing tax rates for foreign residents
will be subject to whether the foreigner is from a treaty country or non-treaty country. In terms of
acquired any form of assets in Australia to provide a form of written information and record
pertaining to the acquisition and use of assets. However, small businesses may benefit through
some of the CGT concessions under some circumstances.
Goods and Services Tax(GST) is a form of consumption tax that is administered on most
of the goods and services that are sold and consumed locally in Australia. The Australian
Taxation Office often requires that the businesses are able to register with them. Businesses that
have been able to pay for the business supplies will be entitled to input tax credit and hence some
of the businesses will be eligible to GST concessions. Payroll Tax is a form of tax that is paid as
a result of the wages that are paid to the employees, its basic calculation is based on the amount
of the total wages paid in the course of the month and must be paid in the event that the total
amount exceeds the set threshold for the state or territory of payment (Sheng, Jackson and
Gooday, 2015). This, therefore, means that the payroll tax will vary from one state to another.It
should also be noted that there could exist other forms of business taxes that could be levied
through the Australian government, state and even the territory government based on some form
of business activities. These taxes include those paid as land tax and Fringe Benefits.
Businesses and foreign investors should be able to review these taxes first before
undertaking to apply hence depending on one's case. As a foreign resident in Australia, tax is
generally exempted from any forms of interest, unranked forms of dividends and royalties that
are due to the Australian government. Upon notifying the Australian financial institution of the
existence of your foreign resident status, the tax will be withheld and the time of making the
payment. This means that the foreigner won’t need to make some form of the declaration with
regard to the Australian tax return(Ato.gov.au, 2019). The existing tax rates for foreign residents
will be subject to whether the foreigner is from a treaty country or non-treaty country. In terms of
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents