These emails are designed for businesses investing overseas and those who have plans to do so. We aim to keep the points short and sweet, and to merely list snippets of relevant but easy to read information.
- An Australian company having an employee working abroad for a substantial period can easily result in the company being taxable on its business profits in that foreign country.
- Many foreign countries have a lower company tax rate than that of Australia’s.
- Many countries levy withholding tax on payments to Australia – including in cases where Australia would not levy in the opposite direction (example: payments of management fees).
- The profits of an overseas permanent establishment may well be exempt from tax in Australia.
- Dividends from an overseas subsidiary may well be exempt from tax when received by the Australia parent.
- The US federal corporate tax rate is 21%.
- The US levies corporation tax not only at the federal level but most states also levy corporation tax.
- Some US cities, such as New York, levy a tax on corporations. Meaning in some cases, three tax returns are necessary: federal, state and city.
- An ‘S corp’ is a US-owned corporation that is not itself taxed. In those cases, the US individual shareholder is treated as the taxpayer.
- Unlike Australia, many countries do not have tax consolidation (where group entities are taxed as one unit).
This message is not given in the form of an opinion, legal opinion or tax advice. If any of the information provided is of interest or relevance to you or your company we would strongly recommend you contact us or another qualified professional for specific advice.