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How To Lodge Company Tax Return?

Every company in Australia is considered an artificial entity that is incurred by a set of tax liabilities. You can lodge your company tax return through a registered tax agent. But you should contact them before the last date of tax return filing. Apart from an agent, you can also accomplish the job online with myTax if your business is registered as a sole trader. 

In case your business is a partnership, company or trust, you can file the tax return using standard business reporting (SBR) software. However, if you are not so expert in software basics, you can happily do it using paper. You will need to have your accounts reconciled and financial documents like business activity statement (BAS) and annual GST return, if possible.

What Is Company Tax Return?

As an owner of a small business, you are bound to report the financial condition of your company and also the business activities of the financial year to the Australian Taxation Office (ATO). A company tax return is the financial information of your company that you have to submit every year. In short, it is actually the income tax return of a company. The company’s annual income is included in the return statement.

Apart from the income, different expenses that a company has to bear are also mentioned in the tax return file. Any business company stands upon profits it makes from the trading and transactions and this profit is also tax-deductible. The amount of tax that you have to pay against your profits is also declared in the tax return. Another important statement included in the tax return is the ‘assets and liabilities. 

Assets are those entities that are owned by the business like equipment, buildings or vehicles while liabilities include business debts or loans. Other points included in the tax return are tax offsets and credits. To summarise, your company’s tax return statement will provide a detailed report on the company’s taxable income as well as the company’s tax payable. One thing you must remember is that your personal income will be considered separate from your company income.

When To File Company Tax Return?

Usually, you have to file your company tax return on 31st October every year. Under special circumstances, you may get an extended deadline till 15th May of the following year. There are certain eligibilities for filing company tax return which are as follows:

  1. When you will be filing taxes for your private company, you will not be allowed to include losses that your company had faced in the financial year.
  2. The potential losses that your company has suffered must be compensated and balanced by showing prospective future profits.
  3. The usual rate of paying duties for every company in Australia is 27.50%. If your business pays at a higher marginal tax rate, then it will act as a remunerative tool for your company.
  4. There is a certain tax credit which your company has to pay. Effectively, this tax credit can be passed on to the relevant shareholders. This procedure can be completed by franking credits on the relevant dividends.

These strict rules and regulations are only applicable if your business is registered as a private limited company. You should consult with an expert and highly experienced tax consultant so that you can get the maximum return of your payable tax.

Company Tax Return Due Date 2021

Filing a tax return within the scheduled time and getting it at the usual time helps a business to run smoothly. Usually, the company tax return deadline is 28th February each year. The return process includes both lodgement of the tax return and the payment of tax as well. You can understand it clearly if it’s explained in detail. For the financial year of 2021, the tax return period is covered from 1st July 2020 to 30th June 2021 and the exact date for company tax return lodgement is 31st October 2021. 

Your tax agent will always want to get your tax return lodged within time but it is your responsibility to keep your account books updated and submitted long before the last dates.

Company Tax Return Instructions 2021

You can easily download a PDF document of Company Tax Return 2021 from the suitable website and read the instructions that you have to follow while lodging the income tax return. These instructions include:

  • What’s new? If any change is made to the legislation in the given financial year, then you have to take that into consideration while filing your income tax return. This section includes an economic response to the ongoing COVID-19 pandemic, significant global entity definition amendment and also significant global entity penalties to subsidiary penalties.
  • Schedules: This section involves all the information and schedules that are needed to be completed and attached while lodging for the income tax return. The schedules that are needed to complete are a schedule of additional information, capital gains tax (CGT) schedule, dividend and interest schedule, losses and consolidated group losses schedule, non-individual PAYG payment summary schedule, reportable tax position or RTP schedule etc.
  • General information: As the name suggests, this section contains general reporting details of the company as well as kept records of the accounts. You have to include a number of information of which report of entity tax information, simplified imputation system, debt and equity rules, foreign exchange gains and losses, tax return are to name a few.
  • Instructions to complete the return: To complete the whole process of return, you need to submit another batch of information that includes company information like Tax File Number, name of the company, Australian Business Number. Other information that you need to include here is several items numbered from 1 to 30 which bear different financial data and calculation. The last step of this section is a declaration in which a declaration made by a tax agent as well as a public officer is included. You will also need to include the number of hours that were taken to prepare and complete the tax return.

For tax return and small business tax services, you should consult with a tax consultant to get proper advice on how to follow each step.

More about Company Tax Returns

Filing income tax return and paying them within the proper time will help your business to run successfully. So, as a business owner, it is really important for you to lodge a company tax return within the due date. However, it is always recommended to lodge the return well before the deadline to avoid unexpected surprises. For that, you have to keep your logbooks updated. There are certain steps to successfully complete a company tax return which are as follows:

  • Have your accounts well prepared: For preparing and maintaining accounts and producing financial statements, it is always recommended to hire a professional bookkeeper and a certified tax accountant Perth in your company. You can use suitable software to automatically handle the whole process. And for that, you need to keep your accounts data in the correct order. 

Another point you must keep in mind is that you must follow the preparation guide to maintain accounts so that the software can easily handle the automation.

You have to follow all the instructions pertaining to different fields such as Assets, Liabilities, Equity, Revenue and Expenses. You have to include the correct information in the proper way as directed in the preparation guide. Put it simply, you must maintain the quality of your accounts which will affect the outcome of quality and accuracy of income tax return even if software like LodgeiT can import accounts from any accounting software.

  • Classify your account accurately: You should classify your account quite accurately via line items so that software like LodgeiT can handle the reconciliation easily and make all the necessary parts available which are relevant to your business company. Here also, you should check the preferred classification system. 
  • Watch relevant and necessary training videos: In case you have got recorded dividend payments for the stakeholders of your company, you should watch different training videos uploaded in the software which will help you in various steps like using the company share register, franking account and also dividend payment tools. You should also watch depreciation module training videos in order to calculate depreciation on company assets.
  • You don’t need to read the complete tax return instructions guide: The Company Tax Return Instructions Guide that is provided by the Australian Taxation Office or ATO includes detailed descriptions of each step required to complete tax filing. Well, you need not read the whole thing. Just take a look through the guide menu and sections of the guide that are applicable to distinct aspects of your company.

To get more information, you can consult any tax expert or contact the support desk of the tax lodging software. Getting in touch with us at Palladium Financial Group can be beneficial for you to a great extent, as we will guide you through the entire process of company tax returns.

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