Like everywhere else, Australia encourages its public citizens and foreigners to invest and start a business in the country. However, you need to learn about the different tax benefits and policies of the Australian federal and state governments. The tax benefit covers what you can claim at the time of taxation; therefore, having some knowledge beforehand can save your business valuable cash. Below is all you need to know about the tax benefits for entrepreneurs in Australia.

1. Temporary Full Expensing (TFE)

The Australian government introduced this new tax benefit, specifically targeting small and medium enterprises (SMEs). More than half of the Australian private sector is run by SMEs, reducing unemployment and driving the economy. However, due to the COVID pandemic, SMEs were under threat due to inactivity in the market. This is why Temporary Full Expensing (TFE) was introduced, where owners will be able to reinvest a part of their taxable income in their company's capital. However, this relief is only on capital assets such as furniture and fixtures, vehicles, tools, and machinery.

2. Insurance Claims

Nearly all the businesses are insured globally, and Australia is no different. However, what separates it from the rest is its tax coverage related to insurance. Insurance premiums can be expensive depending on the coverage; this directly affects your administrative expenses, driving the tax higher for the year. But if you are operating in Australia, you can claim insurance premiums from the government, which makes it easier for SMEs. However, you can only claim premiums for accident, disability, burglary, fire, public risk, and vehicles; all other claims will not be entertained.

3. Salaries and Fees

The Australian tax system allows you to claim the tax paid on employee salaries as part of operating expenses. However, the deductions on employee salaries can only be claimed if they are submitted on time to tax authorities. Similarly, union registration fees up to $42 can also be claimed as a tax benefit in Australia. You can also claim consultancy fees in your annual tax return.

4. New Changes

As discussed earlier, COVID has forced Australia to announce some significant changes in their taxation system, beneficial for SMEs. In your annual tax return, you can now claim for protective equipment for the pandemic, accounting practices, equipment bought for remote working, and courses taken to enhance your knowledge on remote and online working. Since these are seen as an added burden to SMEs, the Australian government is doing its best to accommodate such changes.

5. Online Business

If your business has a physical presence but makes sales online, then Australian tax laws apply to them. However, if the business has no physical presence, you don’t need to pay sales tax. As there are little to no operating expenses, you might be exempted from traditional tax laws; however, you are still obliged to submit an annual tax return for the legitimacy of your business.

Taxation allows your business to grow in Australia and globally as well. Keep yourself updated on different changes in taxation laws to run your business smoothly and efficiently.