Compared to other jurisdictions, tax planning in Australia is acknowledged to be a complicated task. An important point to note, when undertaking tax planning in Australia, resident companies are taxed on worldwide income and capital gains. In light of the economic recession the Australia government has made some concessions and to help assist businesses.

Considering the current climate of the global economy, and the need for more transparency, there has been a large shift away from tax havens, Australia has never had such a stigma.

The global recession affected almost every country in the open market with uniformity, albeit in varying degrees. According to several sources; Australia was one of the least effected, regardless there was still an inevitable slight shrinking of the economy.

One of the many initiatives to assist companies in the current economic climate is a 50% tax deduction on eligible company assets for small companies. (To be eligible the asset has to improve the business and not be fringe spending) The same applies to businesses with an annual turnover greater than $2 million, except they have a 30% tax deduction. This is only applicable until the end of 2009 for purchase, and the end of 2010 for installation/use.

Australia has a flat corporate tax rate of 30%, although given the economic downturn the government has instituted several stimulus packages and tax reliefs for the year of 2009. The flat rate of 30% may seem relatively high, but is competitive when compared with other leading economic jurisdictions, as the USA, Japan and India where corporate tax rates range from 30-40%.

Australia prides itself on being an environmental leader, and as such there are numerous initiatives and tax breaks for eco-friendly work habits or the environmental industry. More information can be found at the Australia Tax Office (ATO) website.

Residential personal income tax in Australia is a very complicated process, each individual needs a Tax File Number, that has to be registered with Centrelink. There are then progressive tax rates as per your annual income with the tax year spanning from the 1st of July to the 30th of June. Tax rates for the year 2011-12 are:

AUD$1 – AUD$6,000 is not required to pay tax.

AUD$6,001 – AUD$37,000 is liable for 15c for each $1 over $6,000.

Over AUD$180,000 is liable for $54,550 plus 45c for each $1 over $180,000.

There are many tax-deductables in Australia, homes, cars, schooling; with effective structuring of your taxes you can conduct a fruitful and productive business portfolio in Australia with Healy Consultants' help.