Taxation
This chapter provides extensive information on taxation in Australia with details on income tax, goods and services tax (GST), fringe benefits, tax file numbers and state duties. Remember – you must consult the Australian Tax Office (ATO) or a tax agent if you have any questions.
Acknowledgments
We would like to thank Daniel Smedley, Principal and Accredited Specialist in Tax Law, Harwood Andrews Lawyers, for contributing this chapter through the Fitzroy Law Handbook Online. A particular thanks to the Fitzroy Legal Service for permission to reproduce this chapter here.
Introduction
A number of taxes are imposed by the Federal and State Governments of Australia. This chapter aims to provide you with an understanding of the obligations imposed on taxpayers by Australia's tax system. It will be most useful to you if you are an individual taxpayer, as it focuses on the taxation...
How is Your Income Tax Liability Determined?
You are liable to pay tax on your taxable income earned over an income year. For the vast majority of taxpayers, the income year runs from 1 July to 30 June. The elements of the process can be briefly described as follows: ASSESSABLE INCOME (including net capital gains) – Allowable deductio...
You Responsibilities as a Taxpayer
The need for professional advice Most taxpayers operate on a system of self-assessment which means that, for the most part, you will be responsible for preparing your tax return and assessment of tax. As such, it will be your responsibility to maintain records in a particular way for a number of...
Tax File Numbers
As a taxpayer, you are required to have a tax file number (TFN). Apart from serving as a means of identification of individual taxpayers, the number also helps the ATO in its collection of tax from revenue that may otherwise escape the tax net. If you are an employee, you are required to provi...
The Tax Return
Do you have to file a tax return? Generally, if your taxable income exceeds the minimum tax-free threshold you must lodge a tax return. If you are an Australian resident (but not a primary producer or, in some cases, under 18 years old) the threshold is currently $18,200 effective 1 July 2012. T...
Assessments
Once you lodge your return, the ATO makes an assessment of the amount of tax payable, based on the information you supplied in the return and on any other information in the ATO's possession. Such information may, for example, consist of computer lists of amounts you received as interest and divi...
Private Rulings and Oral Rulings
If you are unsure about the tax treatment of various past or future receipts or expenditure, you may apply to the ATO for a (written)private ruling or an oral ruling. You are entitled to rely upon the ruling and it binds the ATO to the opinion expressed. When faced with an unfavourable private...
Penalties, Interest Charges and Offences Relating to Tax Returns
If you have not complied with your tax obligations, you may become liable to penalties and interest charges. Some of the penalties for these offences can be extremely severe, particularly for deliberate evasion of tax. Penalties apply in addition to ordinary tax payable, rather than in substituti...
Objections, Reviews and Appeals
As an individual, you generally have two years in which to lodge an objection with the ATO after receiving a notice of assessment if you are a taxpayer with simple tax affairs. If you have more complex tax affairs (for example, because you have capital gains or losses), you have four years in whi...
Paying Your Tax
Generally, if you owe more tax than has been withheld from your income during a financial year, you must pay that tax by 1 December of the following financial year. You can pay your tax liability by cheque or money order, direct debit, BPay or at a post office (including by EFTPOS). While an app...
Fringe Benefits Tax (FBT)
Fringe benefits are non-cash benefits provided by employers as a reward to employees or their associates. These benefits include providing interest-free loans, low-cost accommodation, motor vehicles for employees' private use, payment of golf-club membership fees, etc. It will also generally cove...
Goods & Services Tax
The GST is a broad-based consumption tax which aims to tax "private final consumption expenditure". For the most part, it is simply added onto the price of goods and services and paid ultimately by their final consumers, i.e. the individuals who ultimately buy the final good or service. Businesse...
State Duties and Taxes
Duties and taxes imposed by the Victorian Government are administered by the State Revenue Office (SRO). Many of these have been abolished as a result of the introduction of the GST. Further information on each can be obtained from the SRO on 13 21 61 or the website at www.sro.vic.gov.au. Note: ...
Page last updated 19/03/2018