The corporation tax is a factor to take into account if you intend to establish a limited company in Australia. Limited firms must pay this tax on their profits, and the amount you must pay varies depending on a number of criteria. This post will examine how much corporate tax you must pay as well as address other associated issues.
The current company tax rate in Australia is 30%. As a result, you will be required to pay $30,000 in corporation tax if your limited company earns a profit of $100,000. You can use a few exemptions and deductions, nevertheless, to lower your tax obligation. For instance, before determining your tax due, you can deduct any business expenses from your profits, such as rent, employee wages, and equipment costs.
Australian Securities and Investments Commission, or ASIC, is the regulatory organization in charge of registering and overseeing businesses in Australia. There is a charge associated with registering a limited business with ASIC when it is first established. ASIC currently charges $495 for company registration.
You must continue to pay an annual charge to ASIC in addition to the original registration price in order to maintain your company’s registration. The sum you must pay varies according to the size and volume of your business. For instance, if the annual revenue of your business is under $50,000, you will only be required to pay a reduced cost of $55. However, you will be required to pay a higher cost of $1,342 if your company’s yearly income exceeds $1 million.
Whether you choose a formation service or do it yourself, as well as whether you need to pay extra for things like a registered office and mail forwarding, all affect the price of forming a limited company in Australia. However, in Australia, forming a limited company typically costs between $800 and $1,000.
Your limited company must register for GST (Goods and Services Tax) if its yearly turnover exceeds $75,000. Although registering for GST is free, you will still be responsible for paying GST on any taxable supplies you make. Australian GST is now 10%, thus if you offer a good or service for $100, you must charge your clients $110 (including GST).
In conclusion, there are a number of expenses associated with forming and maintaining a limited company in Australia, such as GST, ASIC fees, and corporation tax. To make sure that your business is profitable and complies with Australian tax rules, it is crucial to comprehend these charges and account for them in your business plan.