How about.... a non-profit organisation.
Is it possible to set-up a non-profit organisation with you as the director, which donates money (profits from trading under the non-profit organisation's name) to causes of your choice?
How about.... a non-profit organisation.
Is it possible to set-up a non-profit organisation with you as the director, which donates money (profits from trading under the non-profit organisation's name) to causes of your choice?
Yes - Establish a Private Ancillary Fund.
http://www.philanthropy.org.au/ancillaryfunds/pafs/index.html
Sheesh.
But let's say that the causes are not at all tax deductible? I'm not concerned about the tax-deductibility of my contribution to such a hypothetical fund, so much as it being able to donate it's ongoing profits freely. These could be organisations in other countries, not charities or anything.
organisations in other countries, not charities or anything.
What?
The company can buy some things (eg desks are ok, holidays are not), and gets the GST refunded.
But let's say that the causes are not at all tax deductible? I'm not concerned about the tax-deductibility of my contribution to such a hypothetical fund, so much as it being able to donate it's ongoing profits freely. These could be organisations in other countries, not charities or anything.
On the issue with GST - would it be correct to say that if you register for GST (and do BAS quarterly) as an individual trader you can get the GST refunded on expenses as well?
It sounds like some half-baked scheme to funnel money out of the country tax-free. Can you send the profits overseas? Yes. And then what? Why not just set the company up overseas in the first place? Do you think the ATO will just allow you to send "charitable donations" to an unknown offshore entity? They'll be all over you like a fly on cow ****.
Not at all, just that if you want to donate money to organisations which are not charities or charities in other countries so that your donation cannot be tax deductible, perhaps it is more prudent to set up a company that would donate it's profits to them, etc. That's what I was thinking.
Though now that you bring this up, is it indeed possible and beneficial to set up a company offshore? In some tax haven somewhere? Then you won't need to pay tax in Australia and you could use that company to make whatever purchases or other trades? And that includes running a legitimate company? (Assuming that the company will not need any physical presence so the country it's registered in is irrelevant).
Would anyone recommend any books I can read on this sort of stuff? (And I do mean books, not the Australian accounting law, corporations act, etc).
I reckon if you want to use a tax haven - then move there.
Not at all, just that if you want to donate money to organisations which are not charities or charities in other countries so that your donation cannot be tax deductible, perhaps it is more prudent to set up a company that would donate it's profits to them, etc. That's what I was thinking.
Though now that you bring this up, is it indeed possible and beneficial to set up a company offshore? In some tax haven somewhere? Then you won't need to pay tax in Australia and you could use that company to make whatever purchases or other trades? And that includes running a legitimate company? (Assuming that the company will not need any physical presence so the country it's registered in is irrelevant).
Australian shareholders who have a controlling interest in certain foreign companies are taxed on their share of the foreign company's 'attributable income'. This includes passive income, such as income from investments (for example, rent, some interest, dividends and royalties) and certain sales and services income from related party transactions. This measure will generally not apply where the CFC's income is comparably taxed in certain countries or the income is derived almost exclusively from active business activities. Special anti-avoidance provisions may apply to specific benefits provided (directly or indirectly) by CFCs resident in certain countries, to their associated entities. That is, the benefit may be deemed to be a dividend paid to the recipient taxpayer and assessed accordingly.
But if you're a registered non-profit then what does it matter? You won't pay tax on your profits anyway.
You'll still pay tax in Australia. It will be considered a Controlled Foreign Company by the ATO. There are exceptions to the rule but generally, if you set it up in a low or no tax jurisdiction they will want their share.
If this was America then you'd have far more loopholes to get through. The reality is the ATO does a pretty good job of protecting the revenue base.
There's no books (unless you want some of my old law textbooks) because the average punter on the street doesn't have enough cash to make playing around with tax jurisdictions worthwhile. Hire a tax lawyer; I hope you have deep pockets.
Yeh, that's what I'm getting at - wondering whether that's possible to be considered a non-profit entity if the entity gives trading profits away to those groups or organisations chosen by the director.
Man this country blows
I meant books on company structures and company tax in Australia, etc. Something to give people starting a small business an idea of what sort of regulatory and tax torture they have to get through.
Why because it doesn't allow tax evasion?
For a small business tax is very simple. Money comes in, money goes out, tax office takes its cut.
http://www.cch.com.au/au/onlinestor...er-Tax-Guide-2012-50th-Edition&ProductID=9082
That's a pretty indepth book. Probably best to read it with the tax legislation handy.
Just all these rules and regulations....
Also thanks for the book recommendation, I'll be sure to get it.
Just all these rules and regulations....and why does business have to pay tax anyway? It's basically a double tax since employees get taxed on their income, I just don't like it. Imagine how prosperous Australia would be if people could just go out start and business and employ people and not have to do any tax, accounting, or any other government nonsense.
One thing I do not understand/have a problem with is GST. Let us say I run a business without a physical presence in Australia, selling IT services from US/Euro servers. Do I need to charge Australian customers GST? And if so, how can that possibly be justified?
Also thanks for the book recommendation, I'll be sure to get it.
No. AFAIK, GST on services is dependant on where the service is performed. But then it also might come back to how you set the company up. If you are the only shareholder and you are resident in Australia then presumably you have set the company up overseas to get around paying GST. I'm sure there is some anti-avoidance rule in there to cover that.
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