When you are a new business owner, you must learn how to handle taxes. They are so many different Australian taxes and this can be very overwhelming. Frankly, most new business owners don’t know how to handle taxes, and they may need to hire professionals that specialize in business tax.
Otherwise, you might encounter business tax troubles and have to deal with taxation authorities as a result.
This is why it is best to learn and understand the taxes that your business is liable for, and they are the following:
This type of business tax is paid based upon the type of business that you have. If you are a sole proprietorship, limited company or a partnership firm, you might have to submit tax returns individually are via your business. For instance, sole proprietorship business income is taxed via the owner’s individual income tax returns.
Capital Gains Tax
You don’t have to file a separate business tax return when it comes to capital gains tax, and they are only accounted for if you have capital gains during the year. So, if you have income due to selling business assets, then this is a capital gain. This tax must be accounted for on your income tax returns. Talk to an accountant for further advice.
On the flip side, if your business suffered any type of loss during an asset sale, this is known as a capital loss and it must also be accounted for on your income tax returns. Keep these things in mind because you could benefit from different types of exemptions that are associated with capital gains.
Goods and Services Tax
If you have a goods and services turnover that is more than 75k, then you must pay a goods and services tax. Even if the turnover is less than 75k, your business is still responsible for this business tax if the company offers taxi services and charges fees.
If your turnover is lower than 75k, but you feel that it might go over this amount within the year, you can register and remain registered for one year. But you don’t have to pay this business tax unless you go over that amount. Once registered, add the GST component so that it can be recovered from your customers.
Fringe Benefit Tax
This business tax is paid on all fringe benefits that you provide your employees. It is based upon a percentage of the benefits paid. If you provide fringe benefits to employees, register with ATO and file an individual tax form in addition to your regular form.
Pay as You Go Tax
This business tax is based on your income and investment expectations. What do you plan to make from these things? A part of your income is withheld as you go in order to pay this tax. The same thing may be required for employee income as well. It is withheld via instalments.
This business tax is paid based upon the wages and salaries that you pay for your employees. Do not get it mixed up with the pay as you go business tax. This tax is paid on wages and salaries that are over a specified limit.
Yes, there are plenty of Australian business taxes that business owners need to understand. Make sure that you learn the different rates and due dates for these taxes. Also, ensure that tax records are kept so that you know how each tax was calculated. But all in all, consider hiring a tax professional to help.