Question:

Australians setting up business in the USA – does it make sense?

Answer:

Recent changes are outlined below:

July 1, 2022

Loss carry back for eligible companies extended to cover 2023 income year.
Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
Corporate collective investment vehicle legislative regime introduced.
Temporary full expensing of depreciating assets extended to include 2023 income year.
Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.

December 9, 2021

Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.

August 5, 2021

COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.

July 1, 2021

Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.

July 1, 2021

New Investment Engagement Service launched for businesses planning significant new investments in Australia.
Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
Self-managed superannuation funds can now have six members, increased from four members previously.

‍

March 31, 2021

JobKeeper payments scheme ended.

October 5, 2020

Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.

June 4, 2020

Homebuilder grant for new home or substantial renovation construction is not subject to income tax.

April 1, 2020

COVID-19 cash flow boost payments are not subject to income tax

The USA is a huge wealthy market with high demand for innovative products and services and Australia has largely been unaffected by the imposing of tariffs on other US trading partners. There are sophisticated supply and logistics capabilities and the world's best technology, however, America's litigious reputation and restrictive immigration can be a downside from a business perspective.

There are complex federal, state, county and city taxes and estate and gift taxes, with those negatives somewhat balanced by a low headline corporate tax rates and the flexibility of check the box elections. There are unusual arrangements for corporate residency and complex foreign hybrid and controlled foreign company rules to navigate here in Australia.

Keywords:

Australian Tax Insight|USA Business

Disclaimer: We believe this information to be correct at the time of publication. It is general in nature, for guidance only and is not intended to be personal advice. It should not be relied upon without obtaining professional advice regarding your direct circumstances. No responsibility can be accepted by any publisher, author, editor, contributor or consultant for loss occasioned directly or indirectly to any person acting or refraining from acting wholly or partly upon or resulting from the material in this publication nor for any error in, broken link or omission from the publication.
‍
© Copyright Andrew Lovett – All rights reserved. No part of this publication may be republished in any form or by any means, electronic, photocopying, recording or otherwise, without written permission.