[ESTABLISHING A BUSINESS ENTITY IN AUSTRALIA]
30
or distributor) from advertising or selling products below a specified minimum price. Suppliers are permitted to specify a recommended retail price for their products, however the CCA prohibits suppliers from threatening not to supply goods if those goods are not sold at the recommended retail price, or from otherwise exerting pressure on retailers to sell the goods at a specified price. • Prohibition on Unconscionable Conduct – Unconscionable conduct is a very broad concept that does not have a precise legal definition in the CCA. Broadly speaking, the CCA prohibition on unconscionable conducts seeks to prohibit business conduct that is harsh or oppressive, and that extends beyond the ambit of commercial bargaining or negotiation tactics. • Prohibition on Misleading and Deceptive Conduct – The CCA prohibits persons from, in the course of trade or commerce, engaging in conduct that is misleading or deceptive or that is likely to mislead or deceive. Australian Courts have historically taken a very broad approach in determining the types of conduct that may be misleading or deceptive, which can include activities such as advertising, oral representations, as well as representations in respect to contractual matters.
International Trading Considerations Individuals or entities that conduct businesses in Australia with the intention of trading internationally should also familiarise themselves with the following concepts: • Transfer pricing – Australia’s transfer pricing regime requires that international related-party transactions must be made on arms’ length terms. The primary purposes of the transfer pricing rules are to ensure that the consideration exchanged by the relevant related parties has been agreed on the basis of an acceptable pricing methodology, to ensure an appropriate level of tax is paid. • Customs duty – Customs duty is imposed on goods imported into Australia. The rate of customs duty is generally around 5% of the value of goods (when converted to Australian dollars), depending on the type of goods being imported and the country of origin. GST may also be applied to goods at the time that they are imported. • Excise duty – Excise duty is a commodity- based tax that applies to alcohol, tobacco, fuel, and petroleum products that are produced, stored or manufactured in Australia. In addition to paying the relevant excise duty, businesses that produce, store or manufacture alcohol, tobacco or petroleum products are required to obtain and maintain an excise licence. Other Regulatory Bodies In addition to the regulatory bodies and agencies described above, individuals and companies that carry on businesses in Australia may also need to interact with (and comply with the relevant regulations enforced, or administered by) the following regulatory bodies:
Product Liability – Businesses that manufacture goods or import goods into Australia for the purposes of resale will be liable to consumers for any safety defects in respect of the goods. The CCA provides that consumers may seek compensation from a manufacturer in respect of goods which have safety defects, if it can be established that the defects have caused the consumer to suffer loss or damage.
•
ILN Corporate Group – Establishing a Business Entity Series
Made with FlippingBook Ebook Creator