Overview of the Australian corporate tax system (2025)

The Australian Tax Office (ATO) is the agency that administers the collection of taxes and fees in Australia, in some cases collected by state government offices. The Australian corporate income tax system is complex because there are many different types of taxes.

Some taxes are state levied, meaning that businesses are taxed according to state regulations and the way they are calculated will vary from state to state. Other taxes are federal levied, meaning they are used uniformly across Australia.

The following article by GLA will provide businesses with information about some important taxes that businesses need to know when establishing a company and doing business in Australia.

1. Corporate tax in Australia

Companies incorporated in Australia are required to pay a certain amount of corporate tax each year as determined by the Government. The tax rate varies from year to year. 

Every year, businesses must file tax returns with the Australian Government, including: Corporate income, deductions and income tax payable. However, taxable income and tax rates for businesses in Australia will vary depending on the type of business and the business sector of the company.

In 2025, the standard corporate tax rate in Australia will be 30%. However, businesses with a turnover of less than AUD 50 million and passive income not exceeding 80% of total income will be subject to a concessional tax rate of 25%.

Businesses can learn more about corporate tax in Australia through the following article.:Corporate Income Tax in Australia: A Complete Guide.

2. Capital Gains Tax (Capital Gains Tax ("CGT")) 

CGT is the difference between the initial cost of an asset and the proceeds from its sale. CGT is not a separate tax but part of the income tax system.

3. Fringe Benefits Tax ("FBT") 

FBT is the tax that employers pay on benefits provided to employees or partners (typical examples include benefits tax on transport, parking and personal (non-work) expenses).

Welfare tax is separate from income tax and must be recorded and reported to Australian employers as required by Government regulations.

4. Goods & Services Tax ("GST") 

GST is a tax that is charged on the goods and services of businesses. It is a tax that is applied to all types of goods and services consumed by consumers.

The directors of a company incorporated in Singapore and the managers of the business are responsible for maintaining the accounting records of the company to promptly explain and present the transactions and financial situation of the company when necessary.

Some important notes that businesses need to know about GST:

• The current goods and services tax rate is 10%.
• GST is charged on the final consumer.
• GST is levied on most goods, services and other items sold or consumed in Australia.
• Some supplies are exempt from GST. (For example, certain fresh foods, exports and medical supplies).
• The sale of certain types of property is also subject to GST (e.g. the sale of commercial property), while others are not (e.g. the resale of mum and dad's residential property).
• Businesses that purchase goods or services for use as part of a product or service they provide to consumers may be entitled to a refund of the GST paid.
• Only certain businesses are required to register for GST, currently, businesses with a turnover of more than $75.000 a year must register for GST.
• If you register for GST, you must lodge a quarterly Business Activity Statement ("BAS") with the ATO and transmit your GST documents to the ATO.

5. Withholding Tax 

When paying employees, businesses are required to withhold a certain amount of money to send to the Australian Taxation Office (ATO) periodically – this deduction is called "Pay As You Go ("PAYG") Withholding".

All businesses are required to comply with PAYG withholding obligations, especially if they employ employees. This means that employers must deduct a certain amount from their employees’ salaries/wages, based on the tax rate the employee is required to pay on those salaries/wages (in other words, their employee income). However, businesses must register with the ATO before deducting this amount from employees.

Businesses may also be required to deduct an amount from payments to other businesses in the following circumstances:

• The paid business does not declare the ABN on their tax invoice, or.
• Incorrect ABN quote.

The above information has been compiled by GLA to provide businesses with an overview of tax considerations when establishing a company in Australia.

6. How will GLA support businesses in establishing companies in Australia and providing operational support?

With years of experience in business consulting, GLA has successfully helped many foreign entrepreneurs expanding their companies in Australia. Our key supports are:

• Register your company in Australia with end-to-end guidance.
• Help you choose the most suitable Australian state for your company operations.
• Recommend the right company type based on your business model.
• Handle all necessary paperwork for company registration.
• Provide expert tax advice tailored to your business activities.
• Assist in obtaining the required licenses for your industry
• Support you in opening both physical and online bank account setup in Australia.
• Prepare financial statements and tax returns in accordance with Australian accounting standards.

7. Frequently asked questions about the tax system for companies in Australia

Highlights

• The tax system in Australia is complex, including federal and state taxes, and businesses need to comply with the regulations of each region.
• The standard corporate income tax rate in Australia is 30%
• Businesses with a turnover of over AUD 75.000/year must register for GST and submit regular Business Activity Statements (BAS).
• Employee benefits, income from the sale of assets and wages all have separate tax obligations, which businesses need to understand to avoid violating ATO regulations.
• GLA will support businesses to comply with tax laws, prepare financial reports according to Australian accounting standards effectively, accurately, quickly and legally.