Taxation

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Taxation

  1. 1. Group Members Bhatiya Tarang Rajan Solanki Khushboo Kanakhara Hitaxi Guided by Krunal Bhuva
  2. 2. Taxation In Australia • Australia is a Federation of States • Pre WW1 income tax was levied by the individual states • During WW1 the federal government first levied Income Tax • Between WW1 & WW2 uniform income tax was developed but still gathered by the states • 1942 due to national emergency states handed income tax powers to federal government • After WW2 the Federal Govt refused to hand powers back to the states
  3. 3. Taxation In Australia All Levels of government raise taxation. Local Councils State Governments Federal Governments
  4. 4. State Taxes Payroll Tax Tax levied on wages paid Payable where yearly payroll is greater than $600 000 Payroll Tax Rate = 6%
  5. 5. Other State Taxes Stamp Duties on Transfer of Property Mortgage Duties Vehicle Registration & Transfer
  6. 6. Federal Taxes Income Tax Personal Income Tax Capital Gains Tax Corporate Tax Goods and Services Tax Property Tax Excise Tax Company Tax Fringe Benefits Tax
  7. 7. Income Income will include worldwide source of Salary & Wages Payments made under contract Bank Interest Dividends Rent Received (There are many other sources of Income)
  8. 8. Income Tax Progressive Tax levied on assessable income Income is “World Wide Assessable Income” Assessable Income = Gross Income – Allowable Deductions
  9. 9. Personal Income Tax Personal income taxes in Australia are imposed on the personal income of each person on a progressive basis, with higher rates applying to higher income levels.
  10. 10. Taxable Income Tax Payable Effective Tax Rate $0 -$6 000 Nil 0% $6 001 - $37 000 15c for each $1 over $6,000 0-12.6% $37 001 - $80 000 $4,650 plus 30c for each $1 over $37,000 12.6-21.9% $80,001 –$180,000 $17,550 plus 37c for each $1 over $80,000 21.9-30.3% $180,001 and over $54,550 plus 45c for each $1 over $180,000 30.3-45% Individuals Income Tax Rate
  11. 11. Taxable Income 08-09 Tax Payable Effective Tax Rate $0 -$416 Nil 0% $416-$1,307 66c for each $1 over $416 0-45% $1,307 and over 45% of total income 45% Income Tax For Minors
  12. 12. Capital Gains Tax Capital gain tax in the context of the Australian taxation system applies to the capital gain made on disposal of any assets, except for specific exemptions.
  13. 13. Capital Gains Tax - Exemption Principal Place of residence an asset you acquired before 20 September 1985 cars, motorcycles and similar vehicles compensation you received for personal injury a personal use asset – for example, items such as boats, furniture, electrical goods
  14. 14. Corporate Taxes Companies and corporations pay company tax on profits. Corporate taxes in Australia are calculated at a flat 30% rate.
  15. 15. Goods & Service Tax (GST) The Goods and Services Tax (GST) in Australia is a Value Added Tax (VAT) on the supply of goods and services in Australia. It was introduced by the Federal Government with the A New Tax System (Goods and Services Tax) Act 1999, taking effect from July 1 2000. GST Rate of 10% will be charged on most goods and services consumed in Australia.
  16. 16. Property Tax Local governments are typically funded largely by taxes on land value .
  17. 17. Excise Tax The federal government imposes excise taxes on goods such as cigarettes, petrol and alcohol. You have specific obligations to consider when dealing with excisable goods.
  18. 18. Company Tax The company tax rate is a flat 30%, though through the dividend imputation system Australian residents effectively do not pay this company income tax upon the profits distributed as dividend by Australian resident corporation.
  19. 19. Fringe Benefit Tax Tax on non cash benefits given to employees Paid by employer Is a separate tax to income tax FBT Tax year 31st March FBT Rate = 46.5% and levied on grossed up rate
  20. 20. Fringe Benefits Tax May include such items such as allows an employee to use a work car for private purposes gives an employee a cheap loan pays an employee’s gym membership provides entertainment by the way of free tickets to concerts reimburses an expense incurred by an employee, such as school fees, and gives benefits under a salary sacrifice arrangement with an employee.

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