Whether an individual is a tax paying citizen or not, there is a need to understand and follow tax laws. Australian tax laws are very complex and require diligent tax returns from individuals to file. It is advisable to seek assistance from tax accountants in order to understand tax laws and filing tax returns. There are tax accountants who are also capable of preparing tax returns for individuals on behalf of the individuals.

The tax regime of Australia is based on the System tab and collects tax from individuals and companies both domestic and offshore. Business income tax, personal income tax, capital gains tax, and other taxes are collected from individuals earning income and wealth in Australia. The tax payable on dividends received by shareholders in corporations is generally tax-deductible for the individual shareholder. If the dividend amount is exceeding deductible, the tax is liable to be paid by the corporation shareholders.

There are tax rates applicable to different income levels (as outlined at the ATO). Tax rates payable on dividends are usually the highest in the tax rate table while tax rates payable on capital gains tax are lower. Generally, the higher the income of the individual with the higher tax rate he pays in return for his income derived on the assets in his hands. The same situation applies to business entities. A company with a turnover of more than $A5 million pays a lower tax rate than one that has a turnover less than this.