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This information bought to you by business entry point in partnership with Federal, State and Territory Governments.
Business Entry Point
Taxation
Taxation legislation is administered by the federal and state and territory
governments. Before you can begin operating your new small business you'll need to
know what you must do to comply with government taxation regulations. As well as
applying for an Australian Business Number (ABN), Goods and Services Tax (GST),
Tax File Number (TFN) and Fringe Benefits Tax (FBT), you may be required to pay
state and territory land tax, pay-roll tax and other duties. This page provides
information about the different taxes that may apply, paying tax and managing
taxation records.
Federal Government
Apply for ABN, GST, TFN, PAYG
Apply for ABN, GST, TFN
You can apply for your ABN and register for GST, TFN and PAYG through the
Business Entry Point's ABR public site. If all necessary information has been
provided in the application process, you will receive your ABN during the same
internet session at the end of the registration process. Written notification of the ABN
and any associated registration applications (eg GST) will also be mailed to you
within 28 days of receipt by the ATO. Alternatively you can ring the Business Info line
on 13 28 66.
Australian Business Register (ABR)
The ABR is the central collection, storage and verification system for basic business
identity information from all entities with an Australian Business Number (ABN).
ABRpublic is an online database that contains the publicly available information provided by businesses when they register for an ABN. It is a convenient
way for you to access a partial version of the ABR.
Goods and services tax (GST)
Goods and services tax (GST) is a broad-based tax of 10 per cent on the sale of most goods and services and other things in Australia. You must register for GST if you are an entity carrying on an enterprise - if you are in business and not a hobby you probably meet this requirement, and your annual turnover is at or above the registration turnover threshold of $50,000 (or $100,000 for non-profit organisations). For more information see the ATO's Guide to GST for small business.
Claim deductions and rebates
Business deduction
Under tax law, a person carrying on a business can claim for outgoings that are
necessarily incurred in carrying on their business to produce assessable income,
provided these expenses are not of a private, domestic or capital nature. If your
business:
• has motor vehicle expenses - claim deductions for these expenses
• uses diesel fuel- you may be eligible for grants or rebates under new schemes
• is based at your home - you may be entitled to deductions for expenses relating to
the area you use
• has travel expenses, such as fares, car hire and accommodation - these can
generally be
claimed as deductions
• uses plant such as machinery, tools or computers - it can claim a deduction for the
decline
in value (depreciation).
For more see business expenses check list.
Excise
Excise duty is a tax levied on alcohol, tobacco and petroleum products manufactured
in Australia.
Drawback of excise duty
Excise is a commodity-based inland tax on petroleum (including oil), tobacco and
alcoholic products. This duty is levied on the production of domestic goods, with an
equivalent customs duty levied on similar imported goods. Drawback of excise duty
allows this duty to be refunded on goods that are exported.
Fuel Schemes
Fuel schemes provide grants to reduce the costs of some fuels or to provide a benefit
to encourage the recycling of waste oils.
Non-commercial losses
If you're an individual involved in a business activity that makes a loss you may be
able to claim that loss by offsetting it against your income from other sources, such
as salary or wages. However, there is a restriction on such claims.
Manage your tax affairs online
Tax office’s online services
Take advantage of a range of online services which are not only fast and secure, but
also make it easier for you to comply with your tax obligations. With the Tax Office's
online services you can lodge activity statements and view account details through
the Business Portal, apply for or update details of an ABN and lodge PAYG and fuel
excise grant scheme forms online. The Tax Office's Guide to online services for
business webpage provides full details of their online services.
Obligations to your employees
If your business has employees you are required to deduct tax from their pay,
provide them with payment summaries, contribute to their superannuation, and report
and make payments to the ATO.
Determine the status of your workers
It is important to determine the status of a worker for tax purposes as there are
different obligations under PAYG depending on whether the worker is an employee,
labour hire worker or independent contractor under a voluntary agreement.
Contractors also have obligations under PAYG.
Employees and other workers checklist
If your business has employees you need:
• To register for PAYG withholding (if you're not already registered)
• Withhold amounts from salary and wages and pay them to the ATO
• Contribute to your employees' superannuation
• Report and pay FBT (if you pay them fringe benefits).
If your business engages contract workers they are required to provide for their
income tax liability through PAYG instalments, or you may enter into a voluntary
agreement to withhold amounts on their behalf. If your business acts as a labour hire
firm to provide people to work for others, you need to withhold from payments to the
workers.
Employees leaving – Tax implications
When a member of your staff leaves your employment you will generally make some
sort of final payment to them, generally known as eligible termination payments
(ETPs). Depending on what is included in the payments you make, you will need to
take out different amounts of tax.
Pay your Tax
Activity statements
Businesses use a single form, an activity statement, to report and pay their PAYG
(instalments and withholding), FBT, GST and related tax obligations, and to pay
deferred company and superannuation fund instalments. You use either a Business
Activity Statement if you're registered for GST or an Instalment Activity Statement if
you're not registered for GST. The ATO will send you the appropriate activity
statement before you need to lodge it.
Capital gains Tax
Capital gains tax is the tax you pay on any net capital gain you make. Guide to
capital gains Tax concession for small business provides general information about
the capital gains tax concessions available for small business.
Fringe benefits Tax
Fringe benefits Tax (FBT) is a tax paid on certain benefits employers provide to their
employees in place of salary or wages. A guide for employers provides information
on how to calculate, pay and report your FBT.
Income Tax for business essentials
Income tax is levied on a person's or business' taxable income and is required to be
paid to the federal government.
• Sole traders - don't need to complete a separate return for their business - they use
their personal income tax return to report their business income and deductions.
• Partnerships - complete a partnership tax return to show the partnership's income
and deductions, and how the profit or loss was shared among the partners.
• Companies - complete a company tax return to calculate the income tax the
company should pay.
• Non profit organisations - If an organisation is a charity it may be income tax
exempt or certain types of non-profit clubs, societies and associations are exempt
from income tax.
PAYG withholding
If you have employees you are required to withhold tax from payments you make to
them. You may have to withhold tax from payments to other workers such as contract
workers. You also need to withhold an amount from payments to other businesses if
they don't quote their ABN to you. The PAYG withholding for small business checklist
provides information on how to meet your PAYG withholding obligations.
PAYG instalments for companies
Pay as you go (PAYG) is a system for paying instalments towards the expected tax
liability on a company's business and investment income for the current income
year. This fact sheet explains when and how instalments are paid and how to
calculate the instalment amount.
PAYG instalments for primary producers and special professionals
For primary producers and special professionals, PAYG instalments have flexible
options that help you to structure payments in line with your income.
Record keeping and reporting
Budgeting to pay your Tax
budgeting for your tax obligations is the same as budgeting for any other expense of
the business. You will need to work out how much tax has to be paid and then put
sufficient money aside to cover the tax bill when it falls due. Suggestions are
provided on this page to assist you to budget for tax.
Record keeping
Under tax law, a person carrying on a business must keep records that record and
explain all transactions. See the checklist for what you must do.
Stock takes
If you operate a business, the value of all trading stock you have on hand at the
beginning of the income year (generally 1 July) and the end of the income year
(generally 30 June) is taken into account in working out your taxable income for the
year.
Use Transaction Manager
Transaction manager
Find your government forms, applications and payments in one convenient location.
Transaction Manager provides centralised access to a range of federal, state and
local government transactions including Australian Business Number (ABN)
registrations, permits and licence applications, rates payments and business name
renewals.
State Territory Governments
State and territory taxes include stamp duty, pay-roll tax, and land tax. Each state and territory has its own law for these taxes administered by its revenue office. While the laws between States are comparable, there are some variations. Some state taxes have been abolished as a result of GST.
South Australia
Land Tax
If you own property in South Australia as at 30 June each year you are liable to pay
the land tax assessed for that financial year. Use the calculator to work out how
much you have to pay. Land tax forms are available to download. Various payment
options are available, or you can phone 08 8204 9870 or email
landtax@saugov.sa.gov.au for more information.
Pay-roll Tax
A pay-roll tax liability arises in South Australia when an employer (or a Group of
employers) has a wages bill in excess of $504,000 for services rendered by
employees anywhere in Australia, if any of those services are rendered or performed
in South Australia. You can download a registration form from the RevenueSA
website and you can lodge and pay your pay-roll tax electronically.
Phone 08 8204 9880 or email payrolltax@saugov.sa.gov.au for assistance.
Stamp duty
Stamp duty is a charge on certain documents and transactions, charged at either a
flat rate or an ad valorem rate (based on the value of the transaction), depending on
the particular document or transaction. Online calculations can help to work out the
stamp duty you need to pay. Various application forms are available to download.
Payments may be made in person or by mail. Phone 08 8226 3750 or email
stamps@saugov.sa.gov.au for enquiries.
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