tax company notes fraking
Companies
A company is a distinct legal entity with its own income tax liability.
It is a popular structure for business, offering limited liability and certain taxation advantages.
The annual reporting requirements are much higher for a company structure.
The owner of a small business can only take income from a company structure as wages (director's fees) or dividends. If the company operates a motor vehicle for the use of the owner (director), Fringe benefits taxation will apply.
Unlike partnerships, company losses are not distributed to shareholders or directors.
Students could investigate the Personal Services Income legislation which places some constraints on the use of companies as a way to avoid tax.
The company must lodge a company income tax return, which shows the income and deductions of the company and is used to calculate the income tax that the company should pay.
The company taxation rate is currently a flat 30% on taxable income.
No Medicare Levy is payable by a company.
As with individuals, the income tax of companies is calculated on taxable income, which is the income earned by the company less any allowable deductions. Deductions are the expenses in running the company, such as wages, the cost of stock, rent, bad debts and previous year losses.
Companies must lodge a tax return each year. (Companies must also lodge an annual return with the Australian Securities and Investments Commission.)
The tax return is based on a reconciliation of accounting net profit to taxable income. That is to say, items which are not allowable for taxation purposes are adjusted either up or down, according to taxation rules. See back cover
Due Dates For Return Lodgment
The tax return can be lodged much later than individual tax returns. The lodgment for 2011/12 Company taxation returns is 28 th February, 2013, and 15th January where it has annual income greater than $10 million. Payment is made with the return’s lodgement.
A company is a distinct legal entity with its own income tax liability.
It is a popular structure for business, offering limited liability and certain taxation advantages.
The annual reporting requirements are much higher for a company structure.
The owner of a small business can only take income from a company structure as wages (director's fees) or dividends. If the company operates a motor vehicle for the use of the owner (director), Fringe benefits taxation will apply.
Unlike partnerships, company losses are not distributed to shareholders or directors.
Students could investigate the Personal Services Income legislation which places some constraints on the use of companies as a way to avoid tax.
The company must lodge a company income tax return, which shows the income and deductions of the company and is used to calculate the income tax that the company should pay.
The company taxation rate is currently a flat 30% on taxable income.
No Medicare Levy is payable by a company.
As with individuals, the income tax of companies is calculated on taxable income, which is the income earned by the company less any allowable deductions. Deductions are the expenses in running the company, such as wages, the cost of stock, rent, bad debts and previous year losses.
Companies must lodge a tax return each year. (Companies must also lodge an annual return with the Australian Securities and Investments Commission.)
The tax return is based on a reconciliation of accounting net profit to taxable income. That is to say, items which are not allowable for taxation purposes are adjusted either up or down, according to taxation rules. See back cover
Due Dates For Return Lodgment
The tax return can be lodged much later than individual tax returns. The lodgment for 2011/12 Company taxation returns is 28 th February, 2013, and 15th January where it has annual income greater than $10 million. Payment is made with the return’s lodgement.