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Tax rates in Australia

Tax Rates

Consumption Taxes

Nature of the Tax
GST: Goods and Services Tax
Tax Rate
10%
Reduced Tax Rate
Zero-rated supplies do not incur the tax but still allow for input tax credits. Examples include essential food items, water, various health and medical supplies, educational services, health insurance, sewage and drainage services, childcare, international transport and mail services, and exports of goods and services provided to non-residents of Australia who are not present in the country during the supply.
Other Consumption Taxes
Imports are subject to customs duties (maximum rate of 5%). Excise duties apply on products like beer, spirits, liqueurs, tobacco, cigarettes, and petroleum products. These excise duties are generally high and are indexed bi-annually based on movements in the consumer price index. Furthermore, a "Wine equalisation tax" applies at the wholesale level to wine from grapes, fruit and certain vegetables, mead, and sake, at a rate of 29% (in addition to GST, which is calculated on the price including the WET - rebates are available).
The government of Australia also levies a luxury car tax at the rate of 33% of the value of the car that exceeds the luxury car tax threshold (in the 2023/24 financial year: AUD 89,332 for fuel-efficient vehicles and AUD 76,950 for other vehicles) and is payable on the GST-exclusive value above the threshold.

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Corporate Taxes

Company Tax
30%
Tax Rate For Foreign Companies
Companies that are residents in Australia are subject to Australian income tax on their worldwide income, while companies that are not resident are taxed only on Australian-sourced income. Nevertheless, if a company is resident in a country with which Australia has a double taxation agreement, Australia will generally tax only the profits attributable to a permanent establishment in the country.
Capital Gains Taxation
Australian tax residents pay capital tax at an ordinary rate of 30% (or at a reduced rate of 26%/25%) on worldwide net capital gains. Capital gains or losses on the disposal of shares by an Australian company in a foreign company in which the Australian company held at least a 10% voting interest for a specified period may be reduced by a percentage that reflects the degree to which the assets of the foreign company are used in an active business. Australian foreign tax residents only include capital gains in assessable income for "taxable Australian property".
For further information, consult the dedicated pages on the website of the Australian Tax Authority.
Main Allowable Deductions and Tax Credits
Exempt income includes certain dividends received from pooled development funds and income from charitable organisations. Deductible items include business expenses, charitable donations to Australian-registered charities and fringe benefits tax payments. Tax offsets are provided for Australian tax residents, such as for dependents. Deductions may be claimed for tax depreciation and previous-year tax losses. Companies can claim a deduction for interest expenses incurred in relation to offshore investments that generate non-assessable, non-exempt dividend income. Bad debts that have been written off as bad before the end of an income year may be deductible. Certain start-up expenses may qualify for a five-year straight-line write-off. Fines and penalties are not deductible. Losses may be carried forward indefinitely, but cannot be carried back. However, companies with a combined turnover under AUD 5 billion can utilize a temporary loss carryback provision, which offers a refundable tax offset, provided specific criteria are met. Losses incurred in the income years 2019/20 through 2022/23 may qualify for offset against taxed profits from 2018/19 onwards.

Taxes (with the exception of the income tax and the Diverted Profits Tax) are deductible if they are incurred in producing assessable income or in carrying on a business for this purpose, and are not of a capital or private nature. Foreign income tax offsets are available to avoid double taxation in respect of foreign tax paid on income that is assessable in Australia. R&D activities undertaken in Australia may qualify for tax incentives.
For further information, consult the pages dedicated to business deductions on the website of the Australian Tax Authority.

Other Corporate Taxes
Other taxes on businesses include fringe benefits tax (47% on the "grossed-up value" of non-salary and wages fringe benefits provided to employees), land tax (except in the Northern Territory), stamp duty on the transfer of real properties (up to 6.5%, although some states may impose a surcharge, for example in case of properties bought by foreigners or for luxury properties).
States and territories impose payroll tax on employers if their total taxable wages exceed specific thresholds, ranging from AUD 700,000 (AUD 900,000 as of 1 July 2024) to AUD 2 million. This tax mainly applies to salaries, wages, fringe benefits, superannuation contributions, bonuses, and certain contractor payments. Rates, reaching up to 6.85%, vary across jurisdictions. Additionally, some states may levy surcharges, up to 1%, to support mental health services or address COVID-19 debt. Employers must fulfill monthly reporting and payment obligations for payroll tax.

Employers must contribute to a registered superannuation fund or retirement savings account on behalf of the employee. The rate is 11.5% of the employee's ordinary time earnings (for 2024, will increase to a rate of 12% from 1 July 2025), with a maximum earning base capped at AUD 62,270 per quarter in 2022/2023.
Australian authorised deposit-taking institutions with total liabilities above AUD 100 billion are subject to a "Major Bank Levy" imposed at a rate of 0.015% on certain liabilities.

The petroleum resource rent tax (PRRT) is a profit-based tax levied at a rate of 40% on profits generated from all onshore and offshore Australian petroleum projects, excluding the joint petroleum development area (JPDA). The profits are taxed on the sale of marketable petroleum commodities.

Furthermore, States impose taxes on insurance premiums. Local taxes, including water, sewerage, and drainage charges, are levied based on the unimproved capital value of land.

Other Domestic Resources
Australian Taxation Office (ATO)

Country Comparison For Corporate Taxation

  Australia OECD United States Germany
Number of Payments of Taxes per Year 11.0 10.1 10.6 9.0
Time Taken For Administrative Formalities (Hours) 105.0 163.6 175.0 218.0
Total Share of Taxes (% of Profit) 47.4 41.6 36.6 48.8

Source: Doing Business, Latest available data.

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Individual Taxes

Tax Rate

Taxable Income Progressive Rate (excluding 2% Medicare levy)
For Residents/Temporary Residents (FY 2023/24) The table does not account for the Medicare levy, an extra 2% of taxable income, applicable to most residents. Certain higher-income taxpayers without private patient hospital cover may face an additional Medicare levy surcharge ranging from 1% to 1.5%.
AUD 0 - 18,200 (this tax-free base is reduced if the taxpayer spends less than 12 months in Australia) 0
AUD 18,201 - 45,000 19%
AUD 45,001 - 120,000 AUD 5,092 + 32.5% on taxable income
AUD 120,001 - 180,000 AUD 29,467 + 37% on taxable income
AUD 180,001 and over AUD 51,667 + 45% on taxable income
Resident taxpayers Medical Levy 2% of taxable income
For Residents/Temporary Residents (FY 2024/25) The table does not account for the Medicare levy, an extra 2% of taxable income, applicable to most residents. Certain higher-income taxpayers without private patient hospital cover may face an additional Medicare levy surcharge ranging from 1% to 1.5%.
AUD 0 - 18,200 (this tax-free base is reduced if the taxpayer spends less than 12 months in Australia) 0
AUD 18,201 - 45,000 16%
AUD 45,001 - 135,000 AUD 4,288 + 30% on taxable income
AUD 135,001 - 190,000 AUD 31,288 + 37% on taxable income
AUD 190,001 and over AUD 51,638 + 45% on taxable income
For Non-Residents (FY 2023/24)
AUD 0 - 120,000 32.5%
AUD 120,001 - 180,000 AUD 39,000 + 37% on taxable income
AUD 180,001 and over 61,200 + 45% on taxable income
Working Holiday makers AUD 0 - 45,000 at 15%
The balance is taxed at ordinary rates
Allowable Deductions and Tax Credits
Expenses may be taken as deductions if they are incurred in gaining or producing assessable income. Charitable donations to Australian-registered charities may be tax-deductible (if they are made towards a "deductible gift recipient"). Expenses of a capital, private or domestic nature are not deductible. Australian residents are allowed some tax offsets, including for dependents, low-income earners and pensioners. For more information about the family tax benefits, consult the website of the Australian government.
Individuals can claim a deduction for contributions made to complying superannuation funds. Certain work-from-home expenses can also be deducted (e.g. phone, Internet, the decline in value of equipment and furniture, and electricity and gas for heating, cooling, and lighting).

Residents receive the first AUD 18,200 of taxable income tax-free, whereas non-residents generally do not benefit from any tax-free threshold.
Where deductions exceed assessable income, an individual can carry forward tax losses to offset against assessable income derived in future income years. The carryback of losses is not permitted.

For further information, consult the pages dedicated to individuals' deductions on the website of the Australian Tax Authority.

Special Expatriate Tax Regime
Australian tax residents are taxed on their worldwide income. Foreign tax relief is generally provided. Non-residents are taxed only on Australian-source income. Whereas the first AUD 18,200 of taxable income is tax-free for residents, non-residents generally do not benefit from a tax-free threshold.
In specific circumstances, senior foreign executives who hold a certain business visa may be exempt from superannuation contributions. Certain benefits taxed under the fringe benefits tax may be exempted for expatriates, including relocation expenses, child education costs and annual home leave travel.

A specific regime applies to working holiday makers (an individual holding a temporary working holiday visa or a work and holiday visa in Australia, generally with a duration of up to one or two years). The first AUD 45,000 of a working holiday maker's income is taxed at 15%, with the balance taxed at ordinary rates.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
Australia Tax Treaty Network
Withholding Taxes
  • Dividends: 0% (residents, where TFN provided)/30% (unfranked dividends paid to non-residents where no treaty relief is available);
  • Interest: 0% (residents, where TFN provided)/10% (non-residents);
  • Royalties: 0% (residents)/30% (non-residents)
Bilateral Agreement
The United Kingdom and Australia are bound by a double taxation treaty.

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Sources of Fiscal Information

Tax Authorities
ATO
Other Domestic Resources
Global Australia

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Latest Update: June 2024

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