Taxation

Sales tax at various rates, levied on the duty paid value, is levied on most products, whether imported or domestically produced. Rates of 10 to 20 per cent apply to most goods. A reduced rate of five per cent applies to a limited range of goods.

Duties of five per cent on:

  • machinery needed for establishment of investment projects
  • unprocessed foodstuffs
  • raw materials
  • capital goods
  • farm machinery.

Major taxes imposed include:

  • Corporate income tax is 40 per cent. There are specific variations e.g. petroleum companies are subject to 40.55 per cent tax rate.
  • Companies involved in specified industrial and export activities are subject to special rate of 32 per cent.
  • Real estate tax.
  • Manufactured goods and some services are subject to sales tax. Taxes are levied on the importer or the manufacturer of goods. The tax is paid upon the sale of goods that are produced locally or used for private purposes by the producer and on all imports. Goods that are exported are exempted from the sales tax.
  • Customs tax is paid on imported goods as determined by the customs tariff.
  • Stamp duty is levied on most types of documents and bills and some types of debentures and bonds.
  • Unified Income Tax Law.
  • A progressive income tax scale applies to all personal income. Included in taxable income are salaries, wages, overtime, bonuses and other benefits. The system is quite complex and companies intending to employ either foreign or local workers should seek advice.
  • Social insurance contributions.
  • Interest from bank deposits, government debentures and treasury bills are exempt from the tax on movable capital, which is 32 per cent. Capital gains and income on debentures of companies listed on the stock exchange are also tax exempt, within the prevailing interest rate on bank deposits for debenture income.

Tax Exemption for Approved Projects

Austrade works in conjunction with the Australian Taxation Office (ATO) to administer the income tax exemption available under section 23AF of the Income Tax Assessment Act 1936 ('Tax Act').

Section 23AF should assist the international competitiveness of Australian companies and governmental organisations competing to win international tenders. For further information, visit Tax exemptions for approved overseas projects.