International Companies

The coming together of the brightest group of people. We are the leading group of Tax Accountants, Auditors, Bookkeepers, Financial Planners, Lenders and Strategists in Perth and regional WA.

Our focus is to cultivate wealth for our clients, whatever their circumstances. Armada has the strength in numbers to deliver the outcomes you seek

Imagine a team of people, each specialists in their own discipline, working together to deliver outcomes of the highest standard. This team provides much more than basic compliance services.


  • 1. CHOICE OF CORPORATE VEHICLE

    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

     

  • 2. REGISTRATION REQUIREMENTS

    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.

  • 3. ACCOUNTING & REPORTING

    You should first 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.

  • 4. TAX

    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.

  • 5. CUSTOMS & INDIRECT TAXES

    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.
  • 6. BUSINESS EMPLOYEE OBLIGATIONS

    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
  • 7. EMPLOYEE OBLIGATIONS

    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.