An Outline Of Tax Returns Australia

The business structure you operate, determines which tax returns Australia you may be required to lodge. Business people neglecting to adhere to the reporting requirements provided by Australian tax law should keep in mind that weighty penalties can be imposed for non-compliance.

Note: The information in this article is of a general nature. It’s important to consult a small business accountant before acting on any of the information in this article to ensure your specific situation is considered.

Income tax return

Sole trader: Sole traders  must lodge an individual tax return to report your taxable income or loss as well as any business income and other income in the form of salary and wages, dividends and rental income, less any allowable deductions that you are allowed to claim against these amounts.

Partnership: The entity must lodge a partnership tax return. The taxable income value is minimised by reducing the initial gross income value by certain deductible expenses. Your share of all parts of a partnership income such as rental income, dividends and salary must be reported in your own tax return.

Trust: This trust entity must lodge a trust tax return. When taking into account allowable, deductible expenses the amount of tax can be reduced. The obligations of the beneficiary of a trust include reporting all income derived from that trust.

Company: The company must lodge a company tax return. Gross income may be reduced by reasonable allowable expenses to calculate the final net income. A company rate of tax set at 30% applies to corporations operating in Australia. Each entity must submit their own tax return and this applies to individuals as well as companies.

GST Return

Businesses with a projected annual turnover of at least $75,000 ($150,000 for non-profit organisations) are required to lodge a GST return. GST entity registration is the trigger for the requirement to lodge GST returns even if the business is below the minimum threshold levels.

Fringe Benefit Tax Return

Benefits given by employers to employees such as company cars, low interest loans, gym membership and free tickets to concerts as entertainment benefits are usually classed as fringe benefits. Some examples of items where fringe benefits tax is applicable are.

PAYG

If you have employees or pay employees of another business, you are required to withhold an amount from payments you make to them and report these under the PAYG withholding system. It is up to employers to fulfil their reporting obligations regarding PAYG withholding tax in as well as the tax returns specified above.

Payments requiring withholding tax include:

• If you operate a company – payments made to company directors;
• payments for invoices where there is no ABN;
• royalty and interest payments to foreign entities.

In summary Australian tax return types include individual tax returns, partnership tax returns, company tax returns and trust tax returns. This guide also comprised of a short introduction to FBT and PAYG.