Recently, we have had many requests to advise on New Zealand companies starting a business in Australia. It’s certainly good to see New Zealand companies expanding their business offshore. We have highlighted below some of the issues to consider. We find that many companies rush to establish an Australian subsidiary and get on with their business without due planning. A potential outcome is that most Australian pre-tax profit gets paid to both IRD and ATO, leaving the shareholders with the minor share. If you are going to pay the majority of profits in tax, then at least do it after doing due diligence and in full knowledge that other cost effective options have been considered.
See the table below for an outline of the tax implications of starting a business in Australia and answers to questions such as ‘do you have to register an entity as doing business in Australia or could you simply trade in Australia under the NZ entity name?
In some cases, companies avoid considering such issues due to advisory costs. At TPTS we provide pragmatic and cost-effective tax planning advice that enables such companies to get it right from the get-go.
Our other insights can be found here: https://www.tpts.co.nz/blog/
If you wish to see an overview of how COVID-19 and Australian tax then click here: https://www.ato.gov.au/General/COVID-19/Support-for-businesses-and-employers/