Competitive Advantages for Migrants

Tasmania has competitive advantages for migrants seeking sound and rewarding investments in a stable political and social environment. Tasmania compares favourably in comparison to other Australia states in the following areas:

  • Labour costs
  • Stable workforce
  • Land and accommodation costs
  • Port access
  • Business licensing costs
  • Level of industrial disputes
  • Rates of state taxes for business

Starting Up

When starting a business in Tasmania there are a number of requirements that need to be met. These include registering your business name and registering for taxation purposes. Taxation legislation requires you to apply for an Australian Business Number (ABN), Tax File Number (TFN) and register for Goods and Services Tax (GST) before commencing business.

Business Structure

There are four business structures available for taxation purposes. The structures are:

  • 1. Sole trader (an individual doing business on their own)
  • 2. Partnership (a group of people or entities doing business together but not trading as a company)
  • 3. Trust (hold property or money for others)
  • 4. Company (a legal entity which is separate from its shareholders)

Sole Trader

A sole trader is a person who owns and manages the business on his or her own. A sole trader must apply for an ABN, which is then used for all the business done. A sole trader uses their personal TFN when they lodge their tax return. The business income, along with any other income is included in the sole trader's individual tax return.

Partnership

A partnership is two or more people or entities that do business as partners or receive income jointly. The partnership is responsible for applying for an ABN. A partnership needs its own TFN. The partnership does not pay tax itself, but each partner includes their share of the taxable income in their personal tax return. The partnership must lodge a separate tax return to report income.

Trust

A trust is an entity holding property or income for another. It has its own ABN applied for by the trustee (or person in charge of the trust). It must have its own TFN, which it uses when lodging its annual tax return. It is the trustee's responsibility to register for the TFN. In the case of trusts it is the beneficiary rather than the trustee that is taxed. Trustees pay tax on any income they receive from the trust.

Company

A company is a separate legal entity from its shareholders who can receive wages and or dividends from the company. Companies are regulated by the Australian Securities and Investments Commission. A company needs to register for both an ABN and TFN. Companies pay company tax, which is usually at a rate of 30%. An individual who receives a dividend from a company that has paid company tax is entitled to a credit for that tax.

Each structure has advantages and disadvantages. It is advisable to seek professional help in determining the structure that best suits a particular situation.

Goods and Services Tax

Goods & services tax (GST) is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. Generally, registered businesses include GST in the price of sales to their customers and claim credits for the GST included in the price of their business purchases.