The following article features tax basic information that could make it easier for you to understand and meet the tax obligations, helping you to run your business successfully.
Australian Tax: Income tax levied from businesses
A federal income tax can be levied on the taxable income of a business or an individual. It is computed on the assessable income, subtracting any permissible deductions.
- Assessable income is usually income earned by the business. GST payable after-sales or GST credits are not included.
- Permissible deductions are the deductions made for a number of expenses you usually incur while running the business.
As a business owner, it is mandatory for you to lodge the income tax return every year. This is applicable even if there is a nil tax liability.
Australian Tax: Land tax
This is a yearly tax that must be paid by landowners. This tax is managed by the state government and can be applied anywhere in Australia, except the Northern Territory. Although all the states have almost the same set of laws, there exist a few variations.
The quantum of land tax payable by you depends on the taxable property’s combined and unimproved value. In case the property is owned by your business, land tax needs to be paid. Bear in mind that your residential property is usually exempt from any kind of land tax.
Australian Tax: Capital gains tax
A component of the income tax, capital gains tax is the Australian tax payable on any kind of capital gain. The commonest way to make a capital loss or gain is to sell assets like vehicles or property. When you do so, capital gains tax comes into force. This is applicable even when you give away the asset to another person.
Australian Tax: Excise duties
This is an Australian tax imposed on few goods manufactured or produced in the region. Such goods are termed ‘excisable goods’, and may include petroleum, coal, tobacco and alcohol. If you wish to start a business that deals in excisable goods, you must register your company with the Australian Taxation Office.
Australia Tax: Stamp duty
Territory and state governments impose their taxes on a wide transaction range. Such taxes show variations across territories and states and can be termed general duty, stamp duty or transfer duty. The ambit of stamp duty includes mortgages and leases, agreements on hire purchase and also insurance policies.
This is only a snapshot of the many taxes that business owners need to be aware of. We highly recommend you visit the Australian Taxation Office website.
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