Foundations of Taxation Law

Companies are one of the most common forms of legal entity. They are popular business and investment vehicles and are also used for many other purposes. ASIC’s website indicates that there were 3,241,836 registered companies in Australia as at July 2023. While some of these have only one member, others have many thousands of members. Many large companies are listed on stock exchanges around the world, and their shares are traded daily. At the time of writing, the largest company listed on the Australian Securities Exchange (‘ASX’) was the mining company, BHP Group, which had a market capitalisation of around $230 billion. Companies make up the majority of Australia’s largest taxpayers. Traditionally, Australia has relied heavily on corporate taxation for its tax revenue, and it has one of the highest corporate tax-to-GDP ratios in the OECD. This chapter examines how the tax law applies to companies and their members (eg shareholders). Special taxation rules apply to certain companies, such as PDFs, life insurers, co-operatives, listed investment companies and corporate collective investment vehicles. A separate taxation regime also applies to companies that are members of a consolidated group.