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International Companies

Doing Business in Australia doesn’t have to be hard. Armada has simplified the steps that will help you navigate the necessary compliance requirements to undertake business in Australia.

Our relationship with you is one of a partnership where we both work together to successfully launch your Australian Business Venture.

Lets simplify the complicated and let you go about business whilst Armada handles the rest of your financial obligations.

Australian Incorporated Company
  • Separate legal entity
  • At least one Australian resident director is required
  • Can be entirely foreign owned
  • Is quick to set up.

Suitable where limited liability is important.

Registered Foreign Branch
  • Foreign company is the entity carrying on the business
  • Foreign company can be held liable.
  • Not required for an Australian resident director

Once you have decided on your corporate structure, you will need to attend to the tax registrations.

Tax Registration
  • Australian business number (ABN)
  • Tax File Number (TFN)

If you derive Australian sourced income you will need to register to do business in Australia.

If you have a tax treaty, further research is required on the activity.

Identify the most suitable accounting software for your management reporting needs. Software options include Xero, MYOB, Arrow and Netsuite. Following are the typical compliance requirements per corporate vehicle.

Australian Incorporated Company
  • Annual compliance can include preparation and lodgement of audited Financial Statements
  • Some exemptions available.
    Annual compliance includes Australian Securities and Investments Commission annual reports, Audited Financial Statements

We can align the reporting financial year with the Foreign owned reporting financial year.

Registered Foreign Branch

  • Lodgement of the foreign company accounts with the Australian corporate regulatory body will suffice.

No requirement to prepare financial statements for the trading activity in Australia. The foreign entity will need to lodge a copy of their balance sheet, profit & loss and a cashflow statement.

Tax can be a complicated area. Here is a summary of the key tax areas to consider.

Australian Incorporated Company

  • Taxed on total (worldwide) income that the Australian company earns
  • Earnings paid to foreign holding company as a franked/unfranked dividend
  • Tax rate of either 27.5%or 30% depending on annual income turnover
  • Required to lodge an annual tax return
  • Only required to lodge an annual tax return if deemed a Permanent Establishment

Registered Foreign Branch

  • Taxed on Australian sourced income only
  • We need to establish whether the business activity constitutes a 'Permanent Establishment' for tax purposes. These rules are complex and the outcome will determine your tax obligations.
  • Tax rate of either 27.5% or 30% depending on annual income turnover

Transfer pricing

Transfer pricing is defined as the prices at which companies sell goods, services and intangible assets to related parties. Some multinational businesses attempt to shift their profits to low tax jurisdictions by setting unrealistic prices. The Australian Taxation Office may review or audit businesses with international dealings with the possibility of pricing adjustments and penalties.

Thin capitalisation

The thin capitalisation rules are designed to prevent multinational enterprises shifting profits out of Australia by funding their operations with high levels of debt in order to reduce Australian taxable income.

Withholding tax

Dividends, interests and royalties paid by tax residents of Australia to non-residents can be subject to a tax withholding rate of up to 30%. This rate can be reduced with careful planning, which your consultant at Armada can assist with.

The following taxes can also apply:

  • Goods and services tax (GST) – Australia currently has 10% broad based consumption tax. The business must lodge monthly/quarterly Business Activity Statements. Here they pay net GST collected, Company tax installments and Employee withholding taxes to name a few.
  • Customs duty laws are consistent with international custom laws. This duty is imposed on the importation of goods and payable at the time the goods enter Australia.

Once the business has engaged employees in Australia, it is subject to a range of additional legislative and regulatory provisions as well as additional tax requirements.

  • Pay as you go (PAYG) withholding tax is tax withheld on employees wages.
  • Fringe benefits tax (FBT) – a tax payable if the company or branch provides a benefit to their employee other than salary or wages.
  • Superannuation Guarantee Charge (SGC) – employers are required to provide a minimum level of pension support, currently at 9.5% of the gross salary, which is payable quarterly
  • Payroll Tax – state based tax ranging from 4.25% to 6.85% on wages that exceed a threshold amount. In WA the threshold is $85,000
  • Workers Compensation - business employers may be liable to pay for Workers Compensation premiums to cover employees for any workplace accidents and/or illnesses

The employees of the business will also have tax compliance obligations as follows. We can also assist with this area.

  • Income tax – several factors determine if an employee is subject to Australian personal income tax.
  • The tax payable will differ depending on whether they are classified as a resident or non-resident
  • Medicare levy is payable for employees who are tax residents. This represents 2% of the gross salary and they are generally able to access local health care benefits.
  • Private health insurance - Australia has health care agreements with several countries which can limit access to local hospital cover. Private health insurance is recommended.

The Experts

Anthony Raykos

ASSOCIATE DIRECTOR

TAX AND ACCOUNTING

Troy Figliomeni

DIRECTOR

TAX AND ACCOUNTING

Khim Ng

ASSOCIATE DIRECTOR

TAX AND ACCOUNTING

Mark De Luca

DIRECTOR

TAX AND ACCOUNTING

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    • I have been using Armada for 10 years, two small businesses. They are extremely professional and have assisted us through very trying times. I would recommend their services to anyone and have referred friends in the past who have been extremely satisfied with their service.

      Karen Spencer
    • I have been using Armada for 10 years, two small businesses. They are extremely professional and have assisted us through very trying times. I would recommend their services to anyone and have referred friends in the past who have been extremely satisfied with their service.

      Karen Spencer

    International Companies

    Doing Business in Australia doesn’t have to be hard. Armada has simplified the steps that will help you navigate the necessary compliance requirements to undertake business in Australia.

    Our relationship with you is one of a partnership where we both work together to successfully launch your Australian Business Venture.

    Let's simplify the complicated and let you go about business whilst Armada handles the rest of your financial obligations.

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