There is a saying “There are only two certainties in life – death and taxes.”
The Commonwealth of Australia derives its taxing powers from the Constitution. The Australian Taxation Office (ATO) is the Commonwealth government agency responsible for collection of Federal taxes and administering our taxation laws. Part of the income tax collected by the Commonwealth is shared with the States, to help meet their operating costs.
The former Income Tax Assessment Act was originally proclaimed in 1936. Since then, thousands of amendments have been made to the Act, making it one of the most complex pieces of legislation in Australia. Taxpayers are therefore STRONGLY advised to seek professional assistance when dealing with Australian income tax law. Over the past two years, the Act has been re-written, in an effort to make it easier to understand. The new Act came into force on July 1, 1997. The re-write continues.
Each year millions of Australians lodge an income tax return. Workers employed on a wage pay most of their income tax as a regular deduction from their wages. This tax is remitted periodically by employers on their behalf to the ATO. The annual income tax return declares a taxpayer’s income from all sources and the taxpayer may make legitimate tax deductions incurred in earning their income. An assessment is made of the return lodged to the ATO and a refund or an amount payable usually arises. Most profitable small business taxpayers pay their income tax annually.
Australia’s financial year operates from July 1 to June 30 each year.
Each year the ATO produces a magazine style booklet called “Tax Pack”, which is a guide designed to assist individual taxpayers in completing their annual income tax returns. This guide has itself become a voluminous piece, which many taxpayers find daunting.
Australia has thousands of registered tax agents who are qualified to prepared and lodge income tax returns, and to charge a fee for this service. If you need assistance in preparing your Australian income tax return, from a qualified, registered tax agent then please contact us.
You can read about our income tax return service here.