Tax Law in Australia

Commonwealth is the federal or national government permitted to impose taxation on all Australian taxpayers. Australia’s tax system combines direct and indirect taxes levied by the Commonwealth and individual states, depending on the type. An overview of Australia’s tax system is provided in this article.

Most business taxes in Australia are collected by the Australian Tax Office (ATO), including income tax, payroll tax, and capital gains tax. State-based taxes are also applicable in some cases, such as the GST. Moreover, Australia has established various tax treaties with other nations to avoid double taxation of foreign entities operating there.

Below you will find additional information about taxes in Australia.

Commonwealth taxes
Jurisdiction to tax

According to Australian federal tax law, residents of Australia are liable to pay taxes on income from worldwide sources. Still, non-residents are responsible for paying only taxes on Australian sourced income.

The Australian tax law has specific rules regarding residency applicable to individuals and companies.

In Australia, an income amount is also examined to determine if it is sourced in Australia or another country. Generally, income is determined by where employment or a fixed business is located.

International transactions are generally sourced based on where the relevant contract was made, though there can also be exceptions to this general principle.

Australian business taxes

Several business taxes are imposed in Australia, such as Capital Gains Tax (CGT), Goods and Services Tax (GST), and others.

Personal income tax in Australia

Individuals generally pay their personal income tax through their employer. Their employer deducts the required amount of tax from their pay before they receive it and remits it to the Australian Taxation Office (ATO).

Temporary residents also pay taxes on income earned in Australia, but at different rates from those that apply to permanent residents.