Income Tax (Australia)
The income tax in Australia is the Australian federal government collected and makes more than half of total tax revenue of the Federation. For natural persons, the tax rate is progressive , for companies it is a uniform 30%.
history
Tasmania , then a British colony, was the first to introduce an income tax in 1880, followed by South Australia in 1884. In 1907, all states had introduced an income tax, but each state had its own tax law. A federal income tax was introduced in 1915, but state taxes remained in place for the time being. From 1936 the tax law of the individual states was aligned with one another. In 1942 the federal government passed a law that increased federal income tax while providing compensation to states that abolished their taxes. As a result, all states gradually abolished their income tax. In 1985, the Capital Gains Tax was introduced.
Natural people
Tax base and tax rate
When determining the tax base for natural persons, two basic types of income are distinguished:
- ordinary income , consisting of income from self-employed and non-self-employed activities ( personal income and business income )
- statutory income , consisting of income from capital gains and other income
The sum of which is the principle (taxable income taxable income ). The tax rate on this income is progressive . There is a basic allowance of 18,200 Australian dollars (AUD) regardless of income . For every dollar in excess of this income, the tax is gradually levied with a marginal tax rate of 19 percent to a maximum of 45 percent. In addition, there is usually a mandatory tax for the health system ( Medicare Levy ) of 1.5%.
| Income (in AUD) | Marginal tax rate | effective tax rate |
|---|---|---|
| 0-18,200 | 0% | 0% |
| 18,201-37,000 | 19% | 0 - 9.7% |
| 37,001-80,000 | 32.5% | 9.7 - 21.9% |
| 80,001-180,000 | 37% | 21.9-30.3% |
| from 180.001 | 45% | 30.3 - under 45% |
As in other countries, income tax is transferred to the tax authorities when the salary is paid (usually monthly). The taxpayer's personal tax number ( Tax File Number , TFN for short ), which the employee must provide to his employer, is used for billing purposes . If he fails to do so, the maximum tax rate of 45% will be applied.
The underlying fiscal year in Australia runs from July 1st to June 30th of the following year. After the end of the tax year, the taxpayer can submit an application for a tax return , in which he can claim special costs and exceptions.
Investment income
When calculating the taxable income from capital assets, there are several special regulations and exceptions. For example, in investments that have been owned for more than 12 months, only half of the profit is counted as taxable income. Profits from the sale of the home are exempt from tax liability. Inheritance is also not subject to tax, and Australia does not have its own inheritance tax . Furthermore, profits can be offset against losses from previous years.
A crediting process avoids double taxation on capital income from domestic investments . In addition, Australia has double taxation treaties with a number of countries .
Other taxes linked to income
Medicare Levy
The Medicare Levy is a levy on the health system equal to 2.0% of income. People with a very low annual income are exempted from the tax in whole (up to AUD 21.335) or partially (up to AUD 26.668); somewhat higher exemption limits exist for pensioners and families. Even residents of the Norfolk Island are exempt from the Medicare Levy.
Flood Levy
The Flood Levy is a levy due to the floods in Queensland 2010/2011 in the 2011–12 fiscal year. It was 0.5% from an income of AUD 50,000 and 1% from AUD 100,000. People who were directly affected by the flood disaster were exempt from the tax.
Companies
The corporate income tax rate in Australia has fallen steadily since 1940 (then 45–47%) and is now 30%.
A reduced income tax rate of 15% applies to pension funds ( superannuation funds ). Further special regulations result in a tax rate of approx. 6.5%.
The individual states and territories levy an additional tax on companies, the so-called Payroll Tax . The assessment basis is the entire income paid by the employer to his employees. The payroll tax is only due above an exemption limit, so that small companies are exempt from it.
| State | paid annual income (in AUD) over | tax rate |
|---|---|---|
| New South Wales | 678,000 | 5.45% |
| Queensland | 1,000,000 | 4.75% |
| South Australia | 600,000 | 4.95% |
| Australian Capital Territory | 1,500,000 | 6.85% |
| Victoria | 550,000 | 4.95% |
| Western Australia | 750,000 | 5.50% |
| Tasmania | 1,010,000 | 6.10% |
Web links
- Website Australian Taxation Office (Australian tax authority)
Individual evidence
- ↑ a b Sam Reinhardt, Lee Steel: A brief history of Australia's tax system. (Pdf; 266 kB) Australian Department of the Treasury, accessed on March 19, 2012 (English).
- ^ George Rothman: Assessing the Tax Advantages of Investment in Superannuation. (No longer available online.) Australian Department of the Treasury, April 2000, archived from the original on March 17, 2012 ; accessed on March 19, 2012 (English). Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ^ Rates and thresholds. (No longer available online.) NSW Government Office of State Revenue, July 4, 2011, archived from the original on May 16, 2009 ; accessed on March 18, 2012 (English). Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ^ Payroll tax thresholds. Queensland Government Office of State Revenue, July 6, 2011, accessed March 18, 2012 .
- ^ Payroll Tax. (No longer available online.) South Australian Government Department of Treasury and Finance, Jan. 20, 2012, archived from the original on Aug. 9, 2011 ; accessed on March 18, 2012 (English). Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ^ Payroll Tax - Registration, forms and thresholds. (No longer available online.) ACT Government Revenue Office on March 15, 2012, archived from the original on March 21, 2012 ; accessed on March 18, 2012 (English). Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Payroll Tax - Overview. (No longer available online.) State Government Victora, State Revenue Office, Aug 25, 2010, archived from the original on March 17, 2012 ; accessed on March 18, 2012 (English). Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ^ Pay-roll tax. Government of Western Australia, Department of Finance, accessed March 18, 2012 .
- ^ Payroll Tax. (No longer available online.) Government of Tasmania, Department of Treasury and Finance, archived from the original March 20, 2012 ; accessed on March 18, 2012 (English). Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
