Australia’s tax system is a minefield.

Australia’s tax system is a minefield.

Different taxes and tax rates apply based on who you are and how you’re setup, as well as who the governing authority is.

For example, as individuals, we all have to pay income tax to the federal government, which is its single biggest source of income.

But there are other circumstances where we might also need to pay dues to the state revenue office or land titles office, like stamp duty for example, which is one of the state government’s biggest sources of income.

And to make things even more complicated, depending on the entity paying the tax, sometimes a tax payment can be tax deductible! An example of this would be land tax, or payroll tax.

Clearly, an individual’s income tax is not tax deductible, but tax liability is determined by the entity being taxed, and therefore setting yourself up as an entity other than an individual can have both positive and negative impacts on your tax liability.

For example, setting yourself up as a company if you have the flexibility to do so, can see you limiting your tax liability given companies pay a flat rate of tax, where individuals are taxed on a progressive scale.

Did you catch all that? See, I told you it was a minefield! 

As always, if you need our help, don’t hesitate to reach out.