Australia’s lowest taxes
According to the Organisation for Economic Cooperation and Development (OECD), the average worker in Australia faced a tax burden on labour income of 27.4 per cent in 2013 compared with the OECD average of 35.9 per cent, making Australia the eighth-lowest taxing country of the OECD’s 34 members (Source: OECD, Taxing Wages 2014).
In a country with already comparatively low taxes, Queensland stands out as the state with the lowest taxes and charges. The influential IMD 2014 World Competitiveness Yearbook ranks Australia 17th in terms of overall competitiveness.
Queensland’s payroll tax rate of 4.75 per cent is the lowest in Australia. The threshold for Queensland’s payroll tax is the highest in Australia, ensuring the lowest payroll tax rate in the country (Source: Queensland Government, 2014-15 State Budget, Paper no. 2).
Tax Thresholds and Rates Comparison Australia
|Payroll tax rate
|Payroll tax threshold
|State tax revenue per capita
|Transfer duty on land (taxable value of $1m)
The Australian corporate tax rate of 30 per cent is the seventh highest in the OECD behind the US, Japan, France, Belgium, Portugal and Germany. However, the Federal Government’s aim is to reduce this by 1.5 percentage points to 28.5 per cent from 2015 (Source: OECD, Taxation of Corporate and Capital Income 2014).
Goods and Services Tax
The Goods and Services Tax (GST) is a broad-based 10 per cent tax included in the shelf prices of most Australian goods and services. This is the fourth lowest consumption tax in the OECD (OECD, Value added taxes, June 2014).
R&D Tax Incentive
Companies investing in projects or undertaking activities in Australia may be eligible for the Federal Government’s Research and Development (R&D) Tax Incentive Program. The aim of the incentive is to assist more businesses to undertake R&D and encourage innovation. The program is a self-assessment entitlement-based program. If you have incurred expenditure on eligible activities, then you are entitled to the benefits that are accessed through the income tax system. The R&D Tax Incentive Program will provide a 43.5 per cent refundable R&D tax offset for eligible companies with a group turnover less than $20 million and a 38.5 per cent non-refundable R&D tax offset for all other eligible companies. While the program is specifically targeted towards small and medium-sized companies, it is also open to subsidiaries or local branches of larger corporate groups (Source: AusIndustry, R&D Tax Incentive 2014-15).