Tax in Australia

Who is the tax authority?

The Australian Taxation Office (ATO) is the federal tax authority under the Treasury portfolio. It administers income tax, GST, Fringe Benefits Tax, the Superannuation Guarantee, and excise duties.

The Tax Practitioners Board (TPB) sits alongside the ATO. It regulates registered tax agents and BAS agents under the Tax Agent Services Act 2009. Only TPB-registered practitioners can charge for tax-return preparation on behalf of clients.

State and territory revenue offices operate separately from the ATO. They collect payroll tax, land tax, and stamp duty — charges that can add significant cost for businesses with property or payroll obligations across multiple states.

What is the tax year and when are returns due?

Australia's income year runs from 1 July to 30 June — a fiscal year, not a calendar year. Income earned 1 July 2024 to 30 June 2025 is the 2024-25 income year. This unique structure means Australian returns don't align with January-to-December systems used in most other countries.

Self-lodgers filing through myTax must file by 31 October following year-end. Individuals using a registered tax agent access an extended lodgement programme that can run as late as 15 May of the following year, depending on prior-year compliance.

Who counts as an Australian tax resident?

The Income Tax Assessment Act 1936 contains four residency tests for individuals. Satisfying any single test makes a person a resident for the income year.

• Ordinary concepts test — you reside in Australia based on facts and circumstances (lifestyle, work, family, assets)
• Domicile test — you hold an Australian domicile and do not have a permanent place of abode outside Australia
• 183-day test — you are physically present in Australia for more than half the income year, unless your usual place of abode is overseas and you have no intention to take up residence here
• Superannuation test — Commonwealth-employer Superannuation members are deemed residents regardless of other factors

Residents pay tax on worldwide income. Non-residents pay tax only on Australian-source income, at non-resident rates that exclude the tax-free threshold. Proposed residency test reforms from the 2021-22 Budget were not enacted and remain outstanding — practitioners should apply current four-test law until legislation passes.

What are the personal income tax rates?

Resident individual rates for the 2024-25 and 2025-26 income years (post-Stage-3 cuts, effective 1 July 2024):

The Medicare Levy adds 2% of taxable income for most residents above the low-income threshold. The Medicare Levy Surcharge (MLS) adds an extra 1.0-1.5% for higher-income earners without private hospital insurance.

Non-residents pay tax without the tax-free threshold. The first AUD 135,000 of Australian-source income is taxed at 30% for non-residents, then 37% and 45% apply above the same thresholds.

How does corporate tax work?

Australia's corporate income tax splits into two rates. The rate depends on company size and income composition.

Australia has fully implemented the OECD Pillar Two Global Anti-Base Erosion rules for fiscal years beginning on or after 1 January 2024. Groups with consolidated revenue above EUR 750 million are in scope for the Income Inclusion Rule and Domestic Minimum Tax. Thin-capitalisation rules were restructured from 1 July 2023 — the fixed debt-ratio test was replaced with an EBITDA-based earnings test for general-class entities.

The R&D Tax Incentive provides a refundable 43.5% tax offset for companies under AUD 20 million aggregated turnover. Larger companies receive a non-refundable tiered offset. Australia's dividend imputation (franking credits) system allows companies to attach tax-paid credits to dividends, reducing double-taxation for resident shareholders.

What about GST and indirect taxes?

Goods and Services Tax (GST) is Australia's principal indirect tax — a 10% flat-rate value-added tax introduced in 2000. The ATO administers GST and distributes revenue to the states under intergovernmental agreement.

The mandatory GST registration threshold is AUD 75,000 of GST turnover (AUD 150,000 for non-profit bodies). Overseas suppliers of low-value imported goods and inbound digital services to Australian consumers must register through the ATO's simplified regime above the AUD 75,000 threshold. Wine Equalisation Tax, Luxury Car Tax, and excise on alcohol, tobacco, and fuel operate alongside GST. State payroll tax rates and thresholds vary by state and territory.

How are cryptoassets taxed?

The ATO treats cryptoassets as CGT assets — the same capital-gains framework that applies to other property. The decisive issue for most filers is investor-versus-trader characterisation.

Mining and staking rewards are typically treated as ordinary income at fair market value on receipt. The ATO's data-matching program collects transaction data from crypto exchanges — filers should assume the ATO has visibility of exchange-reported transactions. NFT transactions follow the same investor-versus-trader characterisation analysis.

What is the treaty network?

Australia has approximately 45 comprehensive Double Tax Agreements (DTAs) in force, plus a network of Tax Information Exchange Agreements and the CRS infrastructure. The treaty network concentrates on major trading partners — the US, UK, New Zealand, Japan, China, Germany, South Korea, India, and ASEAN economies.

Australia signed the OECD Multilateral Instrument (MLI) and selected the Principal Purpose Test on covered tax agreements. Most Australian treaties are now read together with the MLI for periods from 1 January 2019 onward. Foreign Income Tax Offsets (FITO) under Division 770 of the ITAA 1997 operate as the domestic credit relief mechanism, capped at the Australian tax payable on the same income. Australia also maintains seven Totalisation Agreements coordinating social-security and pension entitlements.

Where does Australia sit in the global cohort?

Australia anchors Archetype A — the OECD common-law cohort alongside the UK, Canada, and New Zealand. The Indo-Pacific region splits into five distinct tax archetypes.

Superannuation — Australia's mandatory retirement system

Superannuation is a mandatory employer-contribution retirement savings system unique to Australia. Employers must contribute a minimum of 11.5% of an employee's ordinary time earnings to a complying superannuation fund (rising to 12% by 2025). Employee salary-sacrifice contributions and personal deductible contributions are also permitted within annual caps.

Super fund earnings in the accumulation phase are taxed at 15%. The annual concessional contributions cap is AUD 30,000 for 2024-25. Super is preserved until preservation age (60 for most people born after 1964) — early access is restricted to specific compassionate or hardship grounds. Superannuation adds a significant compliance layer for employers, new arrivals, and self-employed Australians.

Common penalties and pitfalls

Foreign individuals and companies encounter several recurring traps when operating in Australia.

When should you talk to an Australian tax pro?

Some situations are straightforward enough to handle through myTax. Others get complicated quickly:

• Your income crosses into the 37% or 45% bracket and you have investment or rental income alongside salary
• You hold overseas assets (property, shares, crypto) as an Australian tax resident
• You are arriving in or departing from Australia mid-year — the four residency tests need to be applied to your specific facts
• You run a business or are self-employed — Division 7A loans, trust distributions, and business-use-of-home claims all attract ATO scrutiny
• Your employer provides non-cash benefits — Fringe Benefits Tax compliance sits with the employer, but the benefit affects your income tax position
• You received a Division 7A loan, trust distribution, or capital gain you are unsure how to characterise
• You have superannuation from a prior employer or an international super fund and need to understand transfer or access rules
• You received an ATO notice of assessment, audit letter, or compliance query

You can find TPB-registered Australian practitioners through the directory below.

This page is general information. It does not constitute personal guidance for your specific situation. Tax rules change. Always check current figures on the ATO website (ato.gov.au) or with a TPB-registered Australian practitioner before filing.