The Australian tax system sets out specific regulations for recording and reporting financial activities of all types of entities. One of the things that determines your reporting requirements for tax returns in Australia is the business structure within which you operate. There are significant penalties for failing to comply with the legislated requirements.
In this article we’ll look briefly at GST, FBT, PAYG and Income tax.
All businesses that have projected annual turnover greater than $75,000 p.a. ($150,000 for non-profit organisations) are required to submit a GST return. Businesses whose projected revenue is below the threshold amount are still able to register if they choose and would then be required to lodge a GST return, usually via a Business Activity Statement (BAS).
Benefits provided to employees by employers are potentially subject to the fringe benefits tax system. These benefits are sometimes provided instead of and in addition to wages. Some examples of FBT items are low interest loans, company cars and certain entertainment expenses.
Businesses are required to withhold tax in certain situations. Soem examples of payments requiring withholding tax include:
- Payments made to the director’s of acompany;
- royalty and interest payments made to foreign entities;
- payments to businesses where an ABN is not provided on an invoice or other document.
The ATO requires employers to report the Pay As You Go taxes that they withhold.
Sole trader: Must lodge an individual tax return to report your taxable income or loss.
Partnership: Must lodge a partnership tax return showing its net income. As a partner, you must also report your share in the partnership net income in your individual tax return.
Company: Must lodge a company tax return showing its net income. The corporate income tax rate is fixed at 30% of the net taxable income.
Trust: Must lodge a trust tax return showing its income less expenses and deductions. Beneficiaries of the trust are also required to report income received from the trust.
For more information speak to your tax accountant.