The most typical kind of GST registration is called Standard Registration. Businesses must register for GST if their yearly revenue exceeds $75,000. Once registered, businesses are able to charge GST on their sales and receive GST credits on their purchases. Additionally, they must file routine GST returns and pay the GST they have gathered to the Australian Taxation Office (ATO).
2. Non-Profit Registration: Under this category, non-profit organizations that have an annual revenue of less than $150,000 are eligible to register for GST. While registered for GST, non-profits are not required to charge GST on their sales but are allowed to collect GST credits on their purchases. Regular GST returns must still be filed, and the ATO must be informed of their operations.
3. Limited Registration: This GST registration option is for companies that exclusively produce supplies that are exempt from GST or subject to input taxes. Owners of residential rental properties and some financial organizations are a couple of examples of companies that might be eligible for limited registration. Despite not being obligated to charge GST on their sales, businesses registered under this category are not permitted to receive GST credits on their purchases. Regular GST returns must still be filed, and the ATO must be informed of their operations.
Regarding the concerns that follow, ASIC fees are exempt from GST because they are not regarded as supplies for GST purposes. However, if they are connected to taxable supplies, some ASIC fees might be subject to GST.
Your company could have its registration stopped or revoked if you don’t pay your ASIC payments. A variety of effects, including as losing legal protections, being unable to conduct business, and being held personally liable for corporate debts, may follow from this.
The answer to the question of who pays more tax, sole proprietors or limited businesses, depends on a number of variables, including the size, structure, and income of the business. Since limited firms are liable to corporate tax and sole proprietors are only taxed on their personal income, limited corporations often pay higher tax rates.
It is crucial to weigh the benefits and drawbacks of both business structures when selecting whether to operate as a limited company or a single proprietor. Limited corporations may be more appealing to investors and provide better legal protections, but they are also subject to additional regulations and taxes. Sole proprietors have greater freedom and pay less in taxes, but they are solely responsible for their company debts and could have trouble getting financing.
The normal, non-profit, and limited types of GST registration are the three available in Australia. Based on their annual revenue and the type of their supplies, businesses should register for GST. ASIC fees don’t include GST, albeit some costs might be, and some fees are not. Your business may have severe repercussions if you don’t pay your ASIC payments. Finally, a firm should carefully analyze all of its alternatives before deciding whether to operate as a limited company or a sole proprietor.