Australia — Tax: Corporate Tax

Key facts

• Standard company tax rate: 30% of taxable income.
• Reduced rate of 25% applies to base rate entities: aggregated turnover under AUD 50 million, with no more than 80% of assessable income being passive income.
• The Australian Taxation Office (ATO) administers company tax; companies must have an Australian Business Number (ABN) and lodge annual company tax returns.
• Australia has an extensive network of double tax treaties with other countries (see the separate Double Tax Treaties document) that can affect withholding taxes on dividends, interest, and royalties paid to related foreign entities.

Steps

1. Obtain an Australian Business Number (ABN) — The ABN is required for businesses operating in Australia and can be applied for through the Australian Business Register website.
2. Register for Goods and Services Tax (GST) if required — If the business turnover is AUD 75,000 or more, GST registration is mandatory. This can be done through the ATO website (see the GST document for detail).
3. Determine whether the base rate entity 25% rate applies — Check aggregated turnover (under AUD 50 million) and the proportion of passive income (no more than 80%) to determine if the company qualifies for the 25% rate instead of the standard 30%.

Costs

• Standard company tax rate: 30% of taxable income
• Base rate entity company tax rate: 25% of taxable income (aggregated turnover under AUD 50 million, passive income ≤80% of assessable income)

Timelines

• Company tax return lodgment: Annual, generally due by 28 February (new companies) or per ATO lodgment program dates for the income year

Required documents

• Australian Business Number (ABN)
• Company registration (ASIC) documents
• Identification documents for directors and shareholders

Common mistakes

• Not registering for GST when required
• Assuming the 25% base rate entity rate applies without checking the passive income and turnover thresholds