Question

Briefly explain the six (6) main taxation and superannuation obligations of an Australian company, including taxes that are paid through the Australian Tax Office.

Answer 1

A Company is subjected to different types of taxation and other super annuation obligati, some of them include

1. Goods and Service Tax (GST) : This is the tax levied on Sale of goods and supply of services. The rates vary based on the type of good or service also. The most common rate for goods being 10%

2. Pay As You Go (PAYG) : This system allows you to pay your expected tax liability in instalments. The ATO will notify you periodically of your PAYG obligation.

3. Income Tax : Every company is subject to Income tax on the earnings made by it during the year. These taxes are paid after calculating the Taxable income using applicable provisions and att applicable btax rates.

4. Australian Business Number : A Company needs to get a ABN for itself. This is used as a reference by Government departments and other businesses. The company is identified by this unique number.

5. Payroll taxes : A Company while paying to its employees, has to pay certain taxes to government which has to be reduced from the amount paid to employees (like withholding taxes) and the balance is paid to employees. These taxes are based on the salary thresholds.

6. Super Contribution : An employer has to pay an amount that equals certain portion of your earnings (usually 9.5%) into employees super account. These can be withdrawn by the employees on retirement.

7. Import Customs duty : These are the duties imposed on imports made into the country. The general rate is 5%, but this will vary for certain goods. If a company imports goods on which import duty is applicable, it has to pay such duty/tax.