AUSTRALIA Law and Practice Contributed by: Scott Colvin, Warren Scott and Lachlan Speirs, Archer Scott Lawyers
restraints are enforceable only to the extent they are reasonable. 4.5 Employee Representations There is no general system of mandatory works coun - cils or board-level employee representation. Trade unions represent their members and may exercise rights of entry, and the Fair Work Commission over - sees enterprise bargaining, which may be conducted at a single enterprise or, in defined streams, across multiple employers. Consultation obligations arise under modern awards and enterprise agreements, particularly in relation to major workplace change and redundancy. Employ - ees enjoy freedom of association, and adverse action taken because of union membership or activity is prohibited. Health and safety representatives may be elected under work health and safety laws. An individual’s liability to Australian income tax depends on residency: residents are taxed on world - wide income and non-residents on Australian-source income. Personal income tax is progressive, with a top marginal rate of 45% plus a 2% Medicare levy, and is collected from employees through pay-as-you-go withholding by the employer. Employers must: • withhold and remit pay-as-you-go amounts; • pay the superannuation guarantee, which is set at 12%, into the employee’s superannuation fund; and • pay fringe benefits tax on non-cash benefits pro - vided to employees. From 1 July 2026, under the Payday Super reforms, the superannuation guarantee must be paid at the same time as salary and wages, rather than quarterly, and is calculated on an employee’s qualifying earn - ings. Employers are also liable for state payroll tax on wages above the relevant state threshold, with rates 5. Tax Law 5.1 Taxes Applicable to Employees/ Employers
and thresholds varying between the states and ter - ritories. 5.2 Taxes Applicable to Businesses A company is subject to Australian tax on its income if it is resident in Australia (by incorporation, or by hav - ing its central management and control in Australia) or derives Australian-source income. The main taxes are as follows. • Corporate income tax at 30%, reduced to 25% for a base rate entity (broadly, a company with aggre - gated turnover below AUD50 million and no more than 80% passive income). Distributed profits carry franking credits under the dividend imputation system, which relieves double taxation for resident shareholders. • Goods and services tax at 10% on most supplies, and withholding tax on unfranked dividends, inter - est and royalties paid to non-residents, subject to relief under Australia’s tax treaties. • Capital gains tax, as part of the income tax, on the disposal of assets. Non-residents are taxed on taxable Australian property, and a foreign resident capital gains withholding obligation applies to acquisitions of taxable Australian real property and related interests from foreign residents, at 15% since 1 January 2025 following the removal of the former value threshold. Stamp duty is imposed by the states on land and certain transactions, includ - ing landholder duty on dealings in land-rich enti - ties. Australia has implemented Pillar Two of the OECD and G20 Two-Pillar Solution. The Taxation (Multina - tional—Global and Domestic Minimum Tax) Act 2024 and its rules establish a 15% global minimum tax for large multinational groups with consolidated annual revenue of at least EUR750 million, comprising an income inclusion rule and a domestic minimum tax for fiscal years beginning on or after 1 January 2024, and an undertaxed profits rule from 1 January 2025. Australia’s domestic minimum tax is recognised as a Qualified Domestic Minimum Top-up Tax with QDMTT safe harbour status on the OECD central record, effec - tive from 1 January 2024.
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