The Commonwealth of Australia comprises the mainland of the Australian continent and many smaller islands. By area, it is the world’s sixth-largest country and is the only nation to govern an entire continent. Australia was one of the first countries to establish democracy in the modern world. The Commonwealth of Australia was formed in 1901 and maintains a stable liberal democratic political system comprising six states and several territories. The population of 24 million is centred in urban areas in the east and in coastal areas.
Australia is a highly developed and wealthy country with the world’s 12th largest economy; in 2015, it entered its 25th year of uninterrupted annual economic growth, averaging 2.9% per year. It ranks second in the UN’s Human Development Index.
Australia is a member of ANZUS, Asia-Pacific Economic Cooperation, the Commonwealth of Nations, G20, the Organisation for Economic Co-operation and Development, the Pacific Islands Forum, the United Nations and the World Trade Organization.
All foreign nationals apart from New Zealand citizens must hold a visa prior to travelling to Australia.
There are two types of migration for non-Australian citizens: temporary and permanent. Temporary resident visas allow non-Australian citizens to remain in Australia for a specified duration for purposes that may include tourism, visiting family, study, work, medical treatment etc. Many temporary visas provide a pathway to permanent residence eligibility.
Golden visa
Visa applicants must meet certain criteria prescribed to the appropriate visa subclass. The criteria prescribed to a visa application will include either ‘at time of lodgement’ requirements, ‘at time of decision’ requirements or a combination of both. Visa applications may be refused if an applicant does not demonstrate that they meet the criteria at the correct time. All visa subclasses include the requirement to satisfy certain health, character and public interest criteria.
Permanent residents are required to spend at least two years in five in Australia, or demonstrate significant ties to Australia, in order to maintain their residence status.
The Australian visa application process is very structured and based on laws, regulations, policy and legislative instruments. Application processing timeframes differ significantly by visa type. Immigration has a priority processing tier, under which visa applications which yield the greatest benefit to the country (skilled visas) will be assessed quicker than those with little benefit (family visas).
Within the temporary and permanent residence programs, there are currently approximately 188 visas known as ‘subclasses’.
The Business Innovation and Investment Programme includes the four following visa streams:
- The Business Innovation stream, for people with business skills who want to establish, develop and manage a new or existing business in Australia. Applicants must be nominated by a state or territory government.
- The Investor stream, for people who want to make a designated investment of at least AUD 1.5 million in an Australian state or territory and maintain business and investment activity in Australia. Applicants must be nominated by a state or territory government.
The Significant Investor stream, for people who are willing to invest at least AUD 5 million into complying significant investments in Australia and want to maintain business and investment activity in Australia. Applicants must be nominated by a state or territory government or Austrade on behalf of the Australian government. - The Premium Investor stream, for people who are willing to invest at least AUD 15 million into complying premium investments in Australia and want to maintain business and investment activity in Australia. Applicants must be nominated by Austrade on behalf of the Australian government. You must submit an Expression of Interest and be nominated by a state or territory government or Austrade on behalf of the Australian government before being invited to apply for this visa.
Citizenship
A child born in Australia to an Australian permanent resident or citizen parent will automatically be entitled to Australian citizenship. A child born outside of Australia to an Australian citizen parent will also be automatically entitled to Australian citizenship.
After four years of lawful residence in Australia, with at least the past 12 months as an Australian permanent resident, it is possible to apply for Australian citizenship. There is a Citizenship Appointment and Test that must be attended and passed, as well as a Pledge that must be made, before Citizenship will be granted.
It is compulsory for adult Australian citizens to vote in Federal, State and Local Government elections, and failure to do so may result in financial penalties. It is also a requirement for Australian citizens to exit and enter Australia using their Australian passport.
Australia allows dual citizenship.
Taxes
The Australian financial/tax year runs from 1 July to 30 June for individuals and business.
Income tax
Individuals must apply for a Tax File Number to be registered with the Australian Taxation Office and lodge annual tax returns. In most cases, tax from wages/salaries is withheld throughout the year and is known as ‘Pay as You Go’ (PAYG). Tax is charged on the income received from salary, wages, investments, shares etc.
The amount of income tax payable is based on how much you earn and your residence status. Australian residents are taxed on income sourced from both Australia and overseas, and are entitled to a tax-free threshold of AUD 18,200. Income tax rates are progressive, with the highest current margin at 45% for salaries over AUD 180,001. In most cases, residents are also required to pay a health care levy (the Medicare Levy), which is currently 2% of taxable income.
Non-residents are subject to tax only on Australian sourced taxable income, though the tax rates are higher. There are a series of tests to determine ‘Residence for Tax Purposes’ status, with the primary consideration being the ‘183 day test’.
Between 1 July 2014 and 30 June 2017, a Temporary Budget Repair Levy of 2% is payable on both resident and non-resident incomes over AUD 180,000 (exfin.com/australian-tax-rates).
Capital Gains Tax (CGT)
CGT applies to all capital gains made on the disposal of any asset, with the exception of the family home. Net gains are treated as taxable income and are subject to CGT. Net capital losses in a tax year may be carried forward and offset against future capital gains.
Inheritance Tax
This death duty was abolished in 1979, and CGT is not payable on the capital gain (or loss) of assets in an estate if they are simply passed on to beneficiaries. If, however, the asset is sold by the Executor and the proceeds are then distributed on, the sale of the asset is subject to CGT.
Goods and Services Tax (GST)
Australia has a GST of 10% which is charged on most goods and services consumed in Australia with the exception of basic foodstuff, education, medical services and government charges.
Corporate taxes
Businesses are liable for paying a number of taxes including Payroll Tax, Fringe Benefits Tax and Corporate Tax (which is charged at a flat 49% rate).
Double Tax Agreement
Australia has an extensive network of double tax agreements.
