- Employees have the responsibilities and obligations to pay tax.
- In Australia, the employers usually deduct a certain amount of an employees pay, and send it to the Australian Taxation Office (ATO). This is called Pay As You Go (PAYG).
- Then, at the end of the financial year, when you complete your tax return, you will know whether you will receive a tax credit, or if you need to pay extra.
Business tax
For businesses taxes are slightly different:
- If the annual sales of the business is less than 50 million, then the tax rate is 25% of the net profit.
- If the annual sales of the business is more than 50 million, then the tax rate is 30% of the net profit.
Tax fraud
Assuming a hypothetical business is not a listed company in the share market, and it wants to minimise its tax expenses (unethically and illegally), what can it do?
Tax fraud. By either lying to the ATO that its sales is actually much lower, or overstating expenses. However, this is illegal and can lead to jail.