UKTI: E-Commerce in Australia –             Brits big business                      20 February, 9.30am - 10am (UK)       ...
‘Sheltons’ &   ‘Starting in Australia’    Sheltons – established in 1994 in Europe    Offices in Denmark, Cyprus and Aus...
Starting in Australia Pty Ltd    Working exclusively with foreigners doing     business in Australia – existing and plann...
E-commerce - phases      Pure export – do nothing           Customs and GST issues           AUD 1,000 exemption – per ...
E-commerce - phases      Pure export – use .com.au domain           Need an Australian entity           Does not necess...
UK vs Australia – company tax       Australia – 30% (flat, not progressive)          – 2012 - reductions announced then wi...
Branch (‘permanent        establishment’)        UK                       ABC Ltd                                         ...
Branch (‘permanent   establishment’)         Do you have a branch (‘Permanent          establishment’ (PE)) in Australia ...
Branch (permanent   establishment)      Examples of a PE in Australia (i.e. gives rise to       30% Australian tax on the...
UK tax – re Australian branch    The profits from an Australian PE are most likely     exempt from tax in the UK if UK bu...
Australian subsidiary        UK                        ABC Ltd                                               ABC Ltd has a...
UK tax - with Australian   subsidiary    30% corporate tax (flat, no progression)    Profits calculation roughly similar...
No PE vs. PE;   PE vs. subsidiary      UK corporate owner, tax aspects:           No PE preferred – slightly less tax in...
Forming & running an   Australian company    Can be formed in a day / on the spot    No minimum share capital needed   ...
Thank you,that’s all forthis time!© Ned Shelton 2013   15
Upcoming SlideShare
Loading in …5
×

Ned shelton ukti e-commerce webinar - 20 feb 13

978 views

Published on

Ned Shelton from Starting in Australia gives tips to British companies thinking of selling products online to Australians.

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
978
On SlideShare
0
From Embeds
0
Number of Embeds
501
Actions
Shares
0
Downloads
6
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Ned shelton ukti e-commerce webinar - 20 feb 13

  1. 1. UKTI: E-Commerce in Australia – Brits big business 20 February, 9.30am - 10am (UK) By Ned Shelton Managing Director, Starting in Australia Pty Ltd N.Shelton@StartingInAustralia.com.au www.StartingInAustralia.com.au www.SheltonsGroup.com Phone +61 2 9089 8792© Ned Shelton 2013 1
  2. 2. ‘Sheltons’ & ‘Starting in Australia’  Sheltons – established in 1994 in Europe  Offices in Denmark, Cyprus and Australia  Areas  Sheltons International Tax Training Institute (Sheltons- SITTI)  Local and international tax  Corporate services  Australian office (Sydney) – not ‘Sheltons’ but ‘Starting in Australia’www.StartingInAustralia.com.au 2
  3. 3. Starting in Australia Pty Ltd  Working exclusively with foreigners doing business in Australia – existing and planned  Services  Tax advice & compliance  Legal assistance  Company secretarial  Full range of accounting services, GST & payroll admin  Providing local director, public officer, co secretary  + business advice, intro to trusted partners & suppliers  Specialists – many specific issues affect the inward investor  Independent – work well with your UK accountants and lawyers  Cost efficient – one stop but specialist shopwww.StartingInAustralia.com.au 3
  4. 4. E-commerce - phases  Pure export – do nothing  Customs and GST issues  AUD 1,000 exemption – per consignee/addressee  No GST on import if GST-free in Aus (e.g., wheelchairs, food, clothing)  Customs duty important  GST payable at customs clearance – unless arrangement made for monthly/quarterly paymentswww.StartingInAustralia.com.au 4
  5. 5. E-commerce - phases  Pure export – use .com.au domain  Need an Australian entity  Does not necessarily cause profits to be taxable in Australia  Useful (in searching), reassuring  Pure export – use .com.au domain + marketing in Australia  Normally still not taxed in Australia on profits– even if have own staff here conducting marketingwww.StartingInAustralia.com.au 5
  6. 6. UK vs Australia – company tax Australia – 30% (flat, not progressive) – 2012 - reductions announced then withdrawn – Applies to Aus subsidiary’s profits and to Aus branch’s profits UK – 24% – 23% from 1 April 2013 – small profits rate currently 20%, new SPR to be announced on 20 March 2013www.StartingInAustralia.com.au 6
  7. 7. Branch (‘permanent establishment’) UK ABC Ltd ABC Ltd has a branch in Aus Australia Branchwww.StartingInAustralia.com.au 7
  8. 8. Branch (‘permanent establishment’)  Do you have a branch (‘Permanent establishment’ (PE)) in Australia – deliberately – or accidently? It matters.  ‘A branch’ – general term, often used in the context of company law  ‘Permanent establishment’ (PE) – a tax term  If UK business has a PE in Australia – taxed in Australia on the ‘business profits’ (i.e. trading profits) attributed to the PE  PE arises if there is a certain type of physical presence in Australiawww.StartingInAustralia.com.au 8
  9. 9. Branch (permanent establishment)  Examples of a PE in Australia (i.e. gives rise to 30% Australian tax on the profits):  An office generally trading / carrying on business  Selling through an (unrelated or related) agent who is mainly working for the UK principal  UK business ‘has a building site or construction or installation project in [Australia] or supervisory or consultancy activity [in Australia] connected with such a site or project, but only if that site, project or activity lasts more than 12 months;’  Example of no PE (no Australian tax):  Export to Australia via unrelated importer  Sales rep who simply introduces customers to the UK business head office  Renting a warehouse (for storage and delivery of your goods)www.StartingInAustralia.com.au 9
  10. 10. UK tax – re Australian branch  The profits from an Australian PE are most likely exempt from tax in the UK if UK business is a UK company  What is best – to have a PE in Australia or not?  UK corporate tax - lower than Australian tax  Thus: best to not be taxed in Australia – thus only pay 23% or less in UK – rather than 30% in Australia  Also: not being taxed in Australia means reduced tax compliance burden in Australia, avoids ‘discussions’ on transfer pricing, etc.  (If the Australian tax rate was less than the UK, best to have a PE here)www.StartingInAustralia.com.au 10
  11. 11. Australian subsidiary UK ABC Ltd ABC Ltd has a subsidiary in Aus Australia ABC Pty Ltdwww.StartingInAustralia.com.au 11
  12. 12. UK tax - with Australian subsidiary  30% corporate tax (flat, no progression)  Profits calculation roughly similar to UK company  No dividend withholding tax on the distribution of the 70 (i.e. 100 less tax of 30)  UK Co potentially not taxed on the dividend of 70 received (exemption method)  Thus: from the 100 pre-tax Aus profits, UK Co receives 70 cash > UK tax (of nil)  Gain on sale by UK Co of shares in Australian subsidiary – potentially exempt in the UKwww.StartingInAustralia.com.au 12
  13. 13. No PE vs. PE; PE vs. subsidiary  UK corporate owner, tax aspects:  No PE preferred – slightly less tax in total – and no/less Australian tax compliance burden  PE vs. subsidiary – little difference (30% Aus tax in both cases, probably no UK tax on dividend from sub or PE profits)  UK corporate owner, non tax aspects:  Far easier to do business in the form of a subsidiary – if significant interaction and transactions in Australia (e.g. employing staff, renting property, marketing, interaction with local customers)  Running a business with no branch (PE) or with a branch – cumbersome  Costs (legal, tax, accounting) – best to have no PE; PE vs. subsidiary: about equal  Depends on the casewww.StartingInAustralia.com.au 13
  14. 14. Forming & running an Australian company  Can be formed in a day / on the spot  No minimum share capital needed  Must have  an Australian resident director (company law) and  an Australian resident public officer (tax law)  Strict responsibilities for both  Small companies do not need to prepare financial statements or be audited  Must always file tax returns  GST (= VAT) quarterly for small companieswww.StartingInAustralia.com.au 14
  15. 15. Thank you,that’s all forthis time!© Ned Shelton 2013 15

×