What Is The Best Business Structure?

Australia offers a wide range of business structures and tax incentives to entrepreneurs, each with its own advantages. If you’re an Australian business owner considering changing your sole trading business to a company, this blog post will explore the potential tax advantages and how you can take advantage of them under specific Australian tax laws.

When changing from a sole trader to a company structure in Australia, you will be liable for corporation tax on profits generated by the company. While the rate of corporate tax is 30%, this is considerably lower than salary or self-employed National Insurance contributions in many cases. This could lead to substantial savings compared to operating as an individual proprietor.

In addition to these monetary benefits, changing your business structure may also enable you to claim additional deductions that could bring down taxable income even further. For example, by setting up a company, individuals may be able to deduct amounts paid out in wages or invested in assets such as plant and machinery under Australian law.

Alternatively, small businesses may take advantage of accelerated depreciation allowances which allow companies to write off certain assets more quickly than would be possible as an individual proprietor.

Finally, establishing a presence abroad through setting up a foreign subsidiary can reduce withholding taxes levied on overseas earnings — another great incentive for Aussie entrepreneurs looking to expand their operations across borders.

As you can see, there are numerous benefits associated with setting up a corporate structure for your Australian business which may help save you money in the long run. However, before making any changes it’s important to seek professional advice so that you make the right decision for both yourself and your business going forward!