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Taxation Services

Company Tax Return

A company is normally required to lodge a Company tax return. A company must apply for a tax file number (TFN) and use it when lodging its annual tax return. All resident companies are liable to pay tax on income derived within Australia and from overseas sources, whereas non-resident companies are liable to pay tax only on income derived within Australia. 

Definition

A company is a legal entity with higher setup and administration costs. Companies also have additional reporting requirements. A company is run by its directors and owned by its shareholders. While a company provides some asset protection, its directors can be legally liable for their actions and, in some cases, the debts of the company. All directors of a company are required by law to verify their identity and get a director identification number (director ID). Companies are regulated by the Australian Securities & Investments Commission (ASIC).

Key features

In this business structure, the company:

  • must apply for a tax file number (TFN) and use it when lodging its annual tax return
  • is entitled to an Australian business number (ABN) if it is registered under the Corporations Act 2001. A company not registered under the Corporations law may register for an ABN if it is carrying on an enterprise in Australia
  • must be registered for GST if its annual GST turnover is $75,000 or more
  • owns the money that the business earns - the individuals who control the business cannot take money out of business, except as a formal distribution of the profits or wages
  • must lodge an annual company tax return
  • usually pays its income tax by instalments through the pay as you go (PAYG) instalments system
  • pays tax at the company tax rate or lower company tax rate (if a base rate entity)
  • maybe eligible for small business concessions
  • must pay super guarantee contributions (SGC) for any eligible workers. This includes you if you are a director of the company and any other company directors.

For further information please visit ATO website.