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 of your personal income. However, the chapter will also provide some assistance to you if you are a small business taxpayer or a non-profit organisation. Limited information is included about the GST and certain other business taxes, as well as some income tax provisions from a business standpoint.

The principal sources of income tax law (collectively referred to in this chapter as “the Acts”) are:

• Income Tax Assessment Act 1936 (Cth) (“ITAA 1936”);
• Income Tax Assessment Act 1997 (Cth) (“ITAA 1997”);
• Taxation Administration Act 1953 (Cth) (“TAA 1953”); and
• Income Tax Rates Act 1986 (Cth) (“ITRA 1986”).

The ITAA 1997 represents a partial re-write of the ITAA 1936. There are also a number of other pieces of related legislation and statutory regulations.

Taxation law is a complex area and, even armed with this chapter and the taxation publications mentioned below (see: “Tax resources”), you may find it necessary to seek advice from the Australian Tax Office (ATO) or a taxation adviser. It must be remembered that this chapter can only provide the most general overview of Australian tax law and necessarily does not cover many of the complexities and contradictions in the law.

Note: Tax law is subject to frequent change. Therefore, while the information contained in this chapter is correct for the 2011/12 income year, unless otherwise noted, the information may not be correct if you apply it to other income years whether past or future.

Tax resources

The chapter focuses on managing the administrative aspects of your tax obligations, rather than what it takes to calculate your tax liability. You can obtain general information concerning the income tax system from ATO publications, including further information on how to calculate your tax liability. The ATO oversees most of Australia’s Federal tax system and is headed by the Commissioner of Taxation (the Commissioner). It publishes an annual TaxPack, which you can rely upon in preparing your income tax returns.

TaxPack can be downloaded from the ATO website at www.ato.gov.au, or telephone the self-help publications ordering system on 1300 720 092 to request a copy (operator assisted 8 am–6 pm, Monday to Friday; automated 24 hours/7 days per week). Copies of TaxPack can also be collected from ATO shop fronts (addresses are listed on the ATO website) and some newsagents and post offices.

Alternatively, individuals can lodge their income tax returns online using the free e-tax service provided by the ATO.

The ATO also publishes a broad range of materials concerning the Australian tax system. These publications can generally be accessed from the main ATO website (see address above) and the ATO Legal Database at https://www.ato.gov.au/single-page-applications/legaldatabase#Law. There is also a wide range of private sector publications, including the Master Tax Guides, published annually by CCH Australia Limited, and the Australian Tax Handbook, published by Thomson Reuters.