How to know which tax returns are applicable to you?
The Australian tax system, encompasses various types of tax returns that individuals, businesses, and entities need to understand.
Here are the different types of Australian tax returns, shedding light on their purposes and significance:
+ Business Activity Statement (BAS)
Only businesses operating in Australia are required to prepare and submit a business activity statement (BAS) as it this report contains the details of a business’ sales, purchases, and expenses on the BAS form. The net amount of GST payable or refundable is calculated by subtracting the amount of GST paid on business expenses from the amount of GST collected on sales. A BAS also includes PAYG withholding information to report the amount of tax withheld from employee wages and other payments
The BAS captures these several key aspects of a business’ financial operations including:
1. Goods and Services Tax (GST) – businesses with a GST turnover of $75,000 or more are required to register for GST and report their GST-related transactions on the BAS
2. Pay-As-You-Go (PAYG) Withholding – only for businesses with employees, they need to report the amount of tax withheld from the wages on the BAS
3. Fuel Tax Credits – businesses with activities that involve fuel usage can claim fuel tax credits used in the business operations.
+ Individual Tax Return (ITR)
Income tax return is the common title for the ITR. The ITR is the most famous tax return there is because most Australians are familiar with this one. In this tax return, individuals report their income and tax deductions to come up with their total tax liability. Individual tax return is the basic tax return to ensure that you meet your tax payable whether you’re an employee, freelancer, or retiree.
+ Company Tax Return
Companies are entities in their own right, and as such, they have a distinct tax return. The Company Tax Return covers the company’s income, expenses, and tax liabilities. This return provides a snapshot of the financial health of the company and its compliance with tax regulations.
+ Partnership Tax Return
Partnerships involve multiple parties working together. The Partnership Tax Return helps partners report their share of income, deductions, and profits or losses. Partnerships themselves don’t pay tax; instead, each partner includes their share of the partnership’s financials in their individual tax return.
+ Trust Tax Return
Trusts are structures that manage assets for the benefit of beneficiaries. The Trust Tax Return outlines the income, deductions, and distributions made to beneficiaries. It’s a mechanism to ensure transparency and compliance within trust operations.
+ Superannuation Fund Tax Return
For those managing self-managed superannuation funds (SMSFs), the Superannuation Fund Tax Return is essential. This return discloses the fund’s income, investments, contributions, and expenses. SMSFs are subject to strict regulations, and filing the correct return helps maintain compliance.
+ Fringe Benefits Tax (FBT) Return
Employers offering non-cash benefits to their employees must report these on the Fringe Benefits Tax Return. This return is crucial for calculating and paying the Fringe Benefits Tax on the value of those benefits.
+ Luxury Car Tax (LCT) Return
If you’re in the business of selling or importing luxury cars, the Luxury Car Tax Return is relevant. This return details the luxury cars sold or imported and calculates the Luxury Car Tax payable.
Understanding the different types of tax return is important for complying with the tax regulations and ensuring proper financial management. Whether you’re an individual taxpayer, a business owner, or a trustee, knowing which return to file and when to file it can make a significant difference in your financial well-being.
Star Advisers offer advices and services to assist you in preparing the tax returns suitable for you!