When investing in Australia, many inbound investors leave tax considerations to the last minute. As Australia is considered a relatively high-tax country with a heavy reliance on foreign investment, it is important for effective tax structuring to be implemented as part of the commercial planning stage of a business.
Income tax is one of the main revenue streams of the Australian Government, and is applied differently depending on an entity’s structure – whether it is a company, a trust or a partnership. Choosing the most advantageous business structure prior to setting up your business can make a big difference to the tax your business will pay in any given year.
Goods and services tax (GST) registration is compulsory for businesses with a GST turnover of AUD $75,000 or more. Whilst your business will not bear the economic cost of GST, it will be responsible for collecting the tax. As the cost of GST is borne by the final consumer, a business can claim GST back on taxable purchases it makes in the course of running its business. There are effective structuring methods to ensure your business’s cash flow is not impacted by periodic reporting of GST.
We have the combined commercial and taxation law expertise to deliver effective solutions for your individual and business circumstances. Leave us a comment or send us an email if you would like more information.