If you’re a registered company in Australia and have traded during the financial year, you must lodge a company tax return if you’ve earned an income.
When it comes to tax, your company is a separate legal entity. Not only will you need to lodge your company’s tax return, but as a company director, you need to lodge a personal return as well (as you derived an income from the company).
As the director of a company, you must be aware of your company’s tax obligations.
If you miss deadlines or don’t comply with the tax regulations, you risk being audited by the taxation office.
So, staying up to date with your company tax returns is highly recommended.
What is included in a company tax return?
Each year, a company must lodge a tax return to show income, deductions, and the income tax they’re liable to pay.
The ATO needs to see your company’s financial position and business activities clearly, so you’ll be asked to provide:
- Annual income
- Expenses
- Balance sheet items
- Tax offsets
- Tax credits (from PAYG instalments)
A company tax return will show your company’s taxable income from the profits you’ve made. The money that remains within the company (after you’ve taken out wages and the like) will be taxable.
The wage you draw from your company is considered your personal income, so you will need to lodge a separate individual tax return.
What are the other types of business tax returns?
Trusts
If you run your business as a trust, you need to lodge a trust tax return, reporting the net income or loss. Each trust beneficiary will need to lodge their own tax return, either as a company or an individual.
Beneficiaries of trusts need to report:
- The distribution they received from the trust
- Other income they may have received (aside from the distribution of the trust) such as dividends, rental income, salary, or wages
Partnership
As a partnership, you need to lodge a partnership tax return, reporting the net income. The partnership won’t pay income tax on the income earned for the financial year.
Each partner in the partnership will pay tax on the income they receive by lodging an individual tax return showing:
- Your share of the partnership’s net income or loss
- Other income they may have received (aside from the partnership income) such as dividends, rental income, salary, or wages
Sole Trader
If you are a sole trader, you’ll need to lodge an individual tax return for sole traders even if your business income is below the tax-free threshold. Â
Sole traders need to report:
- The business income, less any claimable deductions
- Income such as salary or wages, dividends, and rental income, less any claimable deductions
Do I need to lodge a company tax return?
Yes, you’ll need to lodge a company tax return if:
- You’ve received an assessable income
- You’ve carried forward a loss that is more than $1000 even if you’ve received no assessable income
No, you won’t need to lodge a company tax return if:
- You’re a non-profit, resident company that has a taxable income of $416 or less (unless it’s requested from you)
If you are deregistering your company, you must lodge your final company tax return before ASIC deregisters you. You can’t lodge a tax return after you’ve been deregistered, as the ATO won’t be able to process it. So, make sure you’ve done your company tax return first.
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What is the due date for a company tax return?
A company’s tax return lodgement and the payment date is usually the 28th of February.
If you have an outstanding return from the previous financial year, the date of lodgement will be the 31st of October.
It’s advisable to check with your registered tax agent when your company tax return is due to avoid missed deadlines.
Lodging your company tax return is different from your BAS lodgements and is a separate entity. Your BAS dates will either be quarterly or monthly and should not be confused with a tax return.
How to submit a company tax return using Taxopia
If you’re looking for a quick and easy solution to lodging your company tax return, you should try Taxopia’s online accounting solution.
The team at Taxopia has over 40 years of combined experience in business accounting and advisory. They are all registered tax and ASIC agents and work with clients all over Australia.
By streamlining their work procedures with everything online, Taxopia can provide their business clients with a cheaper alternative for lodging their company tax returns.
Depending on the support you need, Taxopia has tax return packages to suit, starting from a low $180 (excl. GST).
Taxopia Lite allows you to do your own company tax return preparation. It’s a brilliant online tool that any company owner can use.
Here’s how it works:
Here’s a summary:
- Visit the Taxopia websiteand click start
- Read the instructions and click next
- Answer the eligibility questions to make sure it’ll work for your company
- Enter details about you and your company
- Enter your credit card details for payment
- You’ll be asked to provide some more detailed information about your company
- ABN, ACN, address, and so on
- The industry you work in
- Year of registration
- Employees
- Enter the income your company earned
- Enter the company expenses (you can click on more info to get help)
- Enter any tax adjustments required (the system will help you with this)
- Your company tax result will then be calculated
- Enter the disclosure items as requested
- Read and confirm the final declaration and click submit
- Your tax return will be emailed to you
You can rest assured that the online platform is safe and secure, fully protected by SSL bank-level security.
If you’d prefer one of our professional tax agents to do the work for you, we offer packages starting at $400 (excl. GST). To talk to our team, please get in touch with us.
