Talking Cents

The Different Types of Business Taxes in Australia

Paying taxes is one of the most critical responsibilities of any citizen. That is why many people hire their personal accountants even if they do not own a business. They want to ensure that the tax-paying process goes smoothly and that they get the tax returns and benefits they must receive. The same goes for small and medium businesses.

Concerning businesses in Australia, there are different types of taxes. There is company tax, capital gains, goods and services tax, payroll tax, and land tax. Not all kinds of taxes will apply to all businesses. Certain types of taxes are industry specific, for instance, Wine Equalisation Tax or WET.

As taxes must be paid by the citizen directly and it is not an automated process, you must know your taxes. This way, you know which taxes are more important than others and the technicalities associated with them. Although you must hire a good accountant to handle your taxation, it's good to know them well on your own.

Following is the list of taxes that small businesses must pay to the Australian Taxation Office (ATO):

1. Company Tax

Company tax is a tax on the source of income for your business. The tax rate varies based on the company's size, industry, business structure, etc. Usually, the base rate is set by the ATO, and the taxes upward of the base rate vary.

2. Capital gains Tax

A company's capital is usually assets acquired by the company that aid in generating more income. Thus, a capital gains tax is levied on the company's capital or assets. More often than not, small businesses are exempted from capital gains tax if they come within a certain bracket. Your business accountant can help you determine this.

3. Goods and Services Tax

Goods and Services Tax is applied to most goods and services sold and bought in Australia. The ATO charges 10% approximately on goods and services. You must register your business for GST and pay these taxes when it's due.

4. Payroll Tax

A Payroll Tax is a tax paid to the government on the salary you give your employees. These are usually calculated and exempted if the businesses do not exceed the threshold for wages. The taxes collected are paid to the local government from where your employees work.

5. Other Taxes

Other taxes include Fuel Tax, Land Tax, Fringe Benefits Tax, Pay As You Go Withholdings, etc.

Consider M.A.S Partners for Small Business Accounting.

There are a plethora of taxation systems that work on different base rates. Some do not apply to small businesses; others apply when you cross a certain threshold. To make sure that you pay all your taxes on time, consider hiring us for small business accounting in Sydney. For more information about our small business accounting services, click here.