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本帖最后由 3IX37 于 2012-9-16 17:31 编辑
Company tax rate is still 30%, individual tax rate varies, the top marginal rate is effectively 46.5% (including medicare levy)
This gives people with high income a lot of incentive to retain PTY company profit in the company and find a way to distribute to individual after tax. Specially now under new s254T Corp Act 2001, company can distribute its profit to its shareholder as long as there is a net asset and solvent, which means a company can distribute profit to its shareholder even when there is no profit. And a distribution can be money or properties. s.6(1) ITAA 1936.
So in what forms can a company distribute?
1) to a emplyee, Wages and Fringe benefits, (any properties, loans and expenses reimbursements, etc)
2) to a Shareholder, Dividends and loans
In relation to the above-mentioned distributions, tax legislation has its own integrity provisions to prevent tax avoidence from happening . Like,
> section 44 ITAA 1936 contends distributions in either form of morney or property from a company to its shareholder are taxable as a dividend for shareholder.
> On the other hand, there is imputation system protect shareholders from double taxation, and
> For any un-repaid loans to a shareholder, Division 7A deems them as an un-frankable dividend, which is taxable at shareholder's hand. (you will lost the imputation credits company paid)
> for other benefits company provides to its employees (like car expenses, Lease benefits), there is a FBT (fringe benefit tax, which imposes 46.5% tax, the the top individual marginal tax rate, to the company.
> others like Value shifting regime, Capital account tainting rules, franking credit streaming rules and Part IVA anit-avoidance regime, etc. (i am not going to get in too much detail here)
> Furthermore, you also need to consider whether your company is PSI (personal service income) entity. There are deduction restrictions for PSI entities, if the required tests are not satisfied.
As you can see, the tax legislation is really sophisticated here in AU. and your business structure is just too simple to need a comprehensive tax planning.
For a company, you also need to meet ASIC requirements to lodge its Special purpose financial report with them and make a solvent declaration, maintain a company constitution and register, having a general meeting annually, keep all meeting minutes and resolution memos. (these are all Corporation Act requirements)
No mention there is GST compliance requirement. quarterly or annually BAS statement.
It is true, as a small business entity, you are eligible for SBE concession. But comparing to this benefits, i think your cost and burden over-weighs.
For a small scale of business like yours, setting up a company might not be the most practical and economical exercise unless you are expecting it is getting bigger very soon. Accountants always want your business, once you set up a company, you need their services to meet all these legal compliance requirements. All these service will cost you $1,000 at least, which is really reasonable, as they need to go through all the transactions and make sure your company complies all the provisions mentioned above. and there is an ASIC fees too. and trust me you don't want to get a lawyer involved to prepare your company constitution, which you might not have a choice, and it is costly.
As a sole trader, you won't have so many legal compliance requirements. and you can offset your business loss to your other income, as long as the required business tests are satisfied. For company all loss need to be carried forward for future year.
But company does give you a veil, so your person assets will not be liable to your business.
I hope this will help you to make an informed decision.
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我家白总要如厕 (2004-12-14) 蜻蜓 
发表于 2012-9-15 20:20
