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Move to Australia
A foreign company may be considered a resident of Australia for income tax purposes if it is incorporated in Australia or carries on business in Australia, and either its central management and control are in Australia or voting power is controlled by shareholders who are residents of Australia. Proposed changes to the corporate residency test aim to consider a foreign company as an Australian tax resident if it has a significant economic connection to the country, with core commercial activities and central management located in Australia. Resident companies are subject to a general corporate tax rate of 30% on worldwide income. Smaller companies with annual revenue below AUD 50 million may qualify for a tax rate of 25%. Foreign companies with a permanent establishment in Australia are also subject to these corporate tax rates.
Capital Gains Tax (CGT):
Australian resident companies are liable to pay CGT on profits from the sale of assets held for investment purposes, generally at the corporate tax rate. Non-resident companies are usually exempt from CGT in Australia, except when they sell “Taxable Australian Property,” which includes Australian real estate and non-portfolio interests (ownership stakes of 10% or more) in entities primarily valued based on Australian real estate. However, some exceptions exist, such as when the real estate value is below AUD 750,000. Non-resident companies selling Taxable Australian Property must have 12.5% of the sale proceeds withheld and remitted to the Australian Tax Office (ATO) by the buyer. The seller can later claim back any excess amounts withheld through a tax return.