Australian GST & Tax Glossary
373 terms explained in plain English, each with a worked example and a link to the official ATO guidance. Search, filter by topic or jump to a letter.
Guides
In-depth guides to GST and the wider Australian tax system.
What is GST? A plain-English guide
How Australia's Goods and Services Tax works, who pays it, who collects it and where it fits in the tax system.
Read the guide →How to calculate GST: formulas and worked examples
The arithmetic behind adding GST to a price and removing it from a GST-inclusive price, with worked examples.
Read the guide →GST registration: when and how to register
The registration threshold, who must register, voluntary registration, and what changes once you are registered.
Read the guide →GST rates and categories: taxable, GST-free and input-taxed
The three GST categories explained, with examples of each and how they affect credits.
Read the guide →Tax invoices: what they are and what they must show
When you need a tax invoice, what it must contain, and how adjustment notes and recipient created invoices work.
Read the guide →Input tax credits: claiming back the GST you pay
What you can claim, what you cannot, and how private use and partial purchases affect credits.
Read the guide →The Business Activity Statement (BAS) explained
What the BAS is, how often to lodge it, the key labels, and how to pay or claim a refund.
Read the guide →Cash or accrual accounting for GST
The difference between the cash and accruals methods and which one suits your business.
Read the guide →GST on imports, exports and international sales
How GST applies when goods or services cross the border, including exports, imports and digital services.
Read the guide →GST and property: sales, rent and the margin scheme
How GST treats residential and commercial property, new homes, going concerns and the margin scheme.
Read the guide →GST compliance, record keeping and penalties
What records to keep, for how long, and what can happen if you lodge late or get GST wrong.
Read the guide →GST in specific situations: food, health, sharing economy and more
Quick answers on how GST treats common situations such as food, education, ridesharing, donations and gifts.
Read the guide →Australian taxes at a glance: beyond GST
A map of the main taxes administered by the ATO and by the states, and where GST fits.
Read the guide →Twelve common GST mistakes and how to avoid them
The errors that most often cost small businesses money, with a checklist for fixing them.
Read the guide →ATO resources and where to get help
The official ATO pages worth bookmarking, plus other places to get free or paid help.
Read the guide →Glossary terms
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A
- ATO and administrationA New Tax System (Goods and Services Tax) Act 1999This is the federal Act that created the goods and services tax in Australia, setting out who must register, what is taxable, how credits work and how GST is reported.View term →
- RegistrationABN cancellationABN cancellation is the process of cancelling your Australian Business Number with the Australian Business Register when you stop carrying on a business, so your details no longer appear as active.View term →
- ConceptsAccounting softwareAccounting software is a program or online service that records transactions, tracks GST, produces reports and can help prepare and lodge your BAS with the ATO.View term →
- ConceptsAccounts payableAccounts payable is the money your business owes to suppliers and other creditors for goods or services you have received but not yet paid for.View term →
- ConceptsAccounts receivableAccounts receivable is the money customers owe your business for goods or services you have supplied and invoiced but have not yet been paid for.View term →
- Accounting methodsAccrual accounting for GSTAccrual accounting for GST means you report GST on sales when you issue the invoice, and claim credits on purchases when you receive the invoice, regardless of when payment happens.View term →
- ConceptsAccruals basisThe accruals basis is an accounting method where income and expenses are recorded when they are earned or incurred, regardless of when money changes hands.View term →
- Capital gainsActive assetAn active asset is a CGT asset used, or held ready for use, in carrying on a business, and it is a basic requirement for the small business CGT concessions.View term →
- DeductionsActual cost methodThe actual cost method lets you claim the work-related share of each running cost, such as electricity, phone and internet, based on what you really spent and how much you used for work.View term →
- GST coreAdjustment eventAn adjustment event is something that changes the GST position of an earlier sale or purchase, such as a refund, cancellation, discount, bad debt or price change, and may require a GST adjustment.View term →
- Invoices and recordsAdjustment noteAn adjustment note is a document issued when a sale or purchase changes after the original tax invoice, such as a refund, discount or cancellation, recording the change and the GST involved.View term →
- Special arrangementsAgentIn GST, an agent acts for another person, the principal, in making or receiving supplies. The principal is generally treated as the one making the supply, and the agent's commission is separate.View term →
- ConceptsAggregated turnoverAggregated turnover is the combined annual turnover of your business, plus that of entities connected with you or affiliated with you, and it is used to test eligibility for small business concessions.View term →
- Income taxAmended assessmentAn amended assessment is a changed version of an earlier tax assessment, issued by the ATO or following a correction you request, that replaces the original figures.View term →
- ComplianceAmendmentAn amendment is a correction to a lodged tax document, such as a BAS or tax return, made by the taxpayer or the ATO to fix an error or change a position.View term →
- BAS and reportingAnnual GST returnAn annual GST return lets some small, eligible businesses report and pay GST once a year instead of every quarter, which reduces how often they have to lodge.View term →
- DeductionsApportionmentApportionment is splitting a cost or supply between business and private, taxable and non-taxable, or different periods, so only the correct portion is deducted or claimed as a GST credit.View term →
- GST coreApportionment of GST creditsApportionment of GST credits means splitting the GST on a purchase between the part used for creditable purposes and the part that is not, so you only claim the creditable share.View term →
- ConceptsArm's lengthDealing at arm's length means two parties act independently, each pursuing their own interests, so that the terms and price reflect what unrelated parties would agree.View term →
- Income taxAssessable incomeAssessable income is the total of all income and gains that are subject to income tax in a year, before any deductions are subtracted.View term →
- ConceptsAssociateAn associate is a person or entity closely linked to you, such as a relative, partner or related company, and tax rules often treat dealings between associates with extra scrutiny.View term →
- ATO and administrationATOThe ATO is the Australian Taxation Office, the federal government agency that administers GST, income tax, PAYG, superannuation compliance and the Australian Business Register.View term →
- ATO and administrationATO online servicesATO online services is the secure portal, accessed through myGov or a business login, where individuals and sole traders can view tax records, lodge returns and manage their dealings with the Australian Taxation Office.View term →
- GST coreAttribution of GSTAttribution of GST is the rule that decides which BAS period a sale's GST or a purchase's credit belongs to, depending on whether you account on a cash or accrual basis.View term →
- Special arrangementsAuctionsAt an auction, the auctioneer usually acts as agent for the seller, so GST depends on whether the seller is registered, and the auctioneer charges GST on its own commission.View term →
- ComplianceAuditAn audit is a formal ATO examination of a taxpayer's records and returns to check that tax, including GST, was reported correctly. It can lead to adjustments, interest and penalties.View term →
- RegistrationAustralian Business Number (ABN)An Australian Business Number is a unique 11-digit identifier for businesses dealing with the ATO and other government bodies, and it is needed to register for GST and avoid withholding on payments.View term →
- RegistrationAustralian Business Register (ABR)The Australian Business Register is the public register, run by the ATO, that holds ABN and GST registration details of Australian businesses and can be searched through ABN Lookup.View term →
- Income taxAustralian resident for tax purposesAn Australian resident for tax purposes is a person or company that meets one of the legal residency tests and is taxed on worldwide income, with access to the tax-free threshold.View term →
- ATO and administrationAustralian Taxation OfficeThe Australian Taxation Office is the full name of the ATO, the federal agency responsible for administering most Commonwealth taxes, superannuation compliance and the business registers.View term →
B
- DeductionsBad debtA bad debt is an amount owed to your business that you have decided you cannot collect and have written off, which may give rise to income tax and GST consequences.View term →
- DeductionsBad debt adjustmentA bad debt adjustment lets a GST-registered supplier recover GST previously paid on a sale that has been written off as bad, and requires buyers who never paid to repay credits.View term →
- Assets and depreciationBalancing adjustmentA balancing adjustment is the income tax adjustment made when a depreciating asset is sold, lost or stops being used, comparing what you received with the asset's remaining tax value.View term →
- Invoices and recordsBank statementA bank statement is a record from your bank listing every transaction in an account over a period, useful for reconciling your books but usually not enough alone to support a GST credit.View term →
- ConceptsBAS agentA BAS agent is a registered professional who provides BAS services, such as preparing and lodging business activity statements and advising on GST and PAYG, for a fee.View term →
- BAS and reportingBAS due dateThe BAS due date is the deadline by which a business must lodge its Business Activity Statement and pay any amount owing, and it depends on the reporting cycle the business uses.View term →
- BAS and reportingBAS lodgmentBAS lodgment is the act of submitting your completed Business Activity Statement to the ATO for a reporting period, through online services, a registered agent or another approved channel.View term →
- Income taxBase rate entityA base rate entity is a company, or other entity, with aggregated turnover under a set threshold and mostly active income, which qualifies for the lower 25% company tax rate.View term →
- Common GST categoriesBasic foodBasic food is the group of unprepared, everyday food and drink items that are GST-free in Australia, such as bread, milk, fruit, vegetables and meat, as opposed to snacks, takeaway and restaurant meals.View term →
- ConceptsBookkeepingBookkeeping is the day-to-day recording and organising of a business's financial transactions, such as sales, purchases, payments and bank activity, so that accurate reports, BAS and tax returns can be prepared.View term →
- BAS and reportingBusiness Activity Statement (BAS)The Business Activity Statement is the form registered businesses lodge with the ATO to report GST and, where relevant, PAYG withholding, PAYG instalments and other tax obligations for a reporting period.View term →
- Income taxBusiness incomeBusiness income is the money a business earns from its trading activities, such as sales and fees, and it forms part of assessable income for income tax purposes.View term →
C
- ConceptsCalendar yearA calendar year runs from 1 January to 31 December. In Australian tax it appears in some contexts, but most obligations run on the 1 July to 30 June financial year.View term →
- Assets and depreciationCapital allowancesCapital allowances are the income tax deductions that recover the cost of capital assets over time, mainly depreciation of equipment and the capital works deduction for buildings.View term →
- DeductionsCapital expenditureCapital expenditure is spending on acquiring or improving a lasting asset for the business, which is generally not deducted all at once but recovered over time through depreciation or other rules.View term →
- Capital gainsCapital gainA capital gain is the positive difference between what you receive when a CGT event happens and the cost base of the asset, before any discount or loss offsets.View term →
- Capital gainsCapital gains tax (CGT)Capital gains tax is not a separate tax but the income tax payable on the profit made when you sell or otherwise dispose of a CGT asset such as property or shares.View term →
- Capital gainsCapital lossA capital loss occurs when the capital proceeds from a CGT event are less than the reduced cost base of the asset, and it can only be used against capital gains.View term →
- Assets and depreciationCapital works deductionThe capital works deduction lets owners claim the construction cost of buildings and structural improvements over time, generally at 2.5% a year, separate from depreciation of equipment.View term →
- DeductionsCar expensesCar expenses are the costs of running a car for business or work, which may be deductible for the work or business portion using either the cents per kilometre or logbook method.View term →
- FBTCar fringe benefitA car fringe benefit arises when an employer makes a car available for an employee's private use, and the benefit is valued using either the statutory formula or operating cost method.View term →
- Indirect taxesCar limitThe car limit is a yearly cap set by the ATO on the cost of a car that can be used to work out depreciation and the GST credit when a business buys a car.View term →
- Income taxCarry-forward lossA carry-forward loss is a tax loss from an earlier year that has not yet been used and is brought forward to reduce taxable income in a later year.View term →
- GST coreCarrying on an enterpriseCarrying on an enterprise means actually running a business or similar commercial activity, which is required for GST registration, charging GST and claiming input tax credits.View term →
- Common GST categoriesCars for disabled peopleCars modified for use by people with a disability can be GST-free when they meet the conditions in the GST law, as can certain modifications made to a vehicle.View term →
- Accounting methodsCash accounting for GSTCash accounting for GST means you report GST on sales when you receive payment and claim credits on purchases when you pay, rather than when invoices are issued.View term →
- ConceptsCash basisThe cash basis is an accounting method where income is counted when you receive payment and expenses are counted when you pay them, rather than when invoices are issued or received.View term →
- ConceptsCash flowCash flow is the movement of money into and out of your business over time, and it determines whether you can pay bills, wages, GST and tax when they fall due.View term →
- Invoices and recordsCash register tapeA cash register tape is the printed or electronic record produced by a till, listing each sale made, and it can serve as a record of sales for GST and income purposes.View term →
- Special arrangementsCashback and discountsA discount reduces the price of a supply, so GST is worked out on the lower amount. Cashback and later rebates may need an adjustment and an adjustment note.View term →
- DeductionsCents per kilometre methodThe cents per kilometre method claims car expenses using a set rate per business kilometre, up to a maximum number of kilometres, without needing receipts for the actual costs.View term →
- Capital gainsCGT assetA CGT asset is any kind of property or a legal or equitable right that is not property, and it is the thing a CGT event can happen to.View term →
- Capital gainsCGT discountThe CGT discount reduces a capital gain by 50% for individuals and trusts, or one-third for complying super funds, when the asset has been held for at least 12 months.View term →
- Capital gainsCGT eventA CGT event is a specific happening, most commonly selling an asset, that triggers a capital gain or capital loss under the capital gains tax rules.View term →
- GST coreChange in creditable purposeA change in creditable purpose happens when the actual or intended use of a purchase turns out to differ from what you claimed, and a GST adjustment may be needed on your BAS.View term →
- Common GST categoriesCharities and non-profit organisationsCharities and non-profit organisations have GST concessions, including a higher registration threshold and GST-free treatment for certain non-commercial activities, but they still must follow GST rules for taxable sales.View term →
- ConceptsChart of accountsA chart of accounts is the organised list of categories your business uses to record transactions, such as sales, wages, rent and GST, and it shapes your financial reports.View term →
- Common GST categoriesChild careChild care is GST-free when it is an approved service under the family assistance law, while other child care arrangements can be taxable if the provider is registered for GST.View term →
- SuperannuationChoice of fundChoice of fund is the right of most employees to choose which complying super fund their employer pays their super guarantee contributions into.View term →
- GST coreClaiming GST creditsClaiming GST credits means recovering the GST included in your business purchases by reporting it on your BAS, provided you are registered, the purchase is creditable and you hold a valid tax invoice.View term →
- ATO and administrationClass rulingA class ruling is an ATO ruling that explains how tax law applies to a defined group of people who are all taking part in the same specific arrangement or scheme.View term →
- PropertyCommercial propertyCommercial property is real property used for business, such as shops, offices and warehouses, and sales and leases by GST-registered owners are generally taxable, so GST is charged on the price or rent.View term →
- PropertyCommercial residential premisesCommercial residential premises are places such as hotels, motels, serviced apartments, caravan parks and hostels that provide residential accommodation commercially, with rules that differ from ordinary residential rental.View term →
- ATO and administrationCommissioner of TaxationThe Commissioner of Taxation is the statutory office holder who is responsible for administering Australia's tax laws, making rulings and decisions, and heading the ATO.View term →
- Business structuresCompanyA company is a separate legal entity registered with ASIC, owned by shareholders and run by directors, which pays tax on its own income at the company tax rate.View term →
- Income taxCompany tax rateThe company tax rate is the rate at which a company's taxable income is taxed, generally 25% for a base rate entity and 30% for other companies.View term →
- GST coreComposite supplyA composite supply is a single sale made up of a main element and minor incidental parts, and the whole sale takes the GST treatment of the main element.View term →
- RegistrationCompulsory GST registrationCompulsory GST registration applies when your GST turnover meets or is expected to meet the registration threshold, or you provide taxi or ride-sourcing services, and you must register for GST.View term →
- Special arrangementsCompulsory third party insuranceCompulsory third party insurance is mandatory motor vehicle injury cover. Premiums generally include GST, and the schemes are run under state and territory laws that vary between jurisdictions.View term →
- SuperannuationConcessional contributionA concessional contribution is a super contribution made from pre-tax money, such as employer super guarantee or salary sacrifice, taxed in the fund at a concessional rate and counted against an annual cap.View term →
- ConceptsConnected entityA connected entity is one that you control, that controls you, or that is controlled by the same third party, and its turnover can be counted with yours for certain tax tests.View term →
- GST coreConnected with AustraliaA supply is connected with Australia when it is made in Australia or otherwise has a sufficient link to Australia, which is one condition for it to be taxable for GST.View term →
- GST coreConsiderationConsideration is anything you receive in return for a supply, including money, goods, services or other benefits, and it generally determines the GST payable on that supply.View term →
- EmploymentContractorA contractor is a person or business that provides services to another under a contract for services, usually working for their own account, using an ABN and invoicing for their work.View term →
- Capital gainsCost baseThe cost base of a CGT asset is the amount made up of what you paid and certain related costs, which is subtracted from the proceeds to work out a capital gain.View term →
- ConceptsCost of salesCost of sales is the direct cost of producing or buying the goods or services you sold in a period, such as stock and direct labour, subtracted from sales to find gross profit.View term →
- State and territory taxesCouncil ratesCouncil rates are charges levied by local councils on property owners to fund local services, they are not administered by the ATO, and they are GST-free.View term →
- Invoices and recordsCredit noteA credit note is a document a seller issues to reduce or cancel an earlier invoice, such as for returned goods or a discount, and it can serve as an adjustment note.View term →
- GST coreCreditable acquisitionA creditable acquisition is something you acquire for your business, from a GST-registered supplier, on which you can claim an input tax credit for the GST included in the price.View term →
- InternationalCross-border supplyA cross-border supply is a sale of goods or services where the supplier and customer, or the goods and services themselves, are in different countries, and GST depends on whether it is connected with Australia.View term →
- GST coreCurrent GST turnoverCurrent GST turnover is your total GST turnover for the current month and the previous 11 months, used to test whether you have already reached the GST registration threshold.View term →
- Indirect taxesCustoms dutyCustoms duty is a tax on imported goods, collected at the border on the customs value, with rates depending on the type of goods and where they come from.View term →
- InternationalCustoms valueCustoms value is the price of imported goods used to calculate customs duty and GST on importation, generally the price paid excluding international freight and insurance.View term →
D
- GST coreDecreasing adjustmentA decreasing adjustment is a GST adjustment that reduces the GST a business must pay or increases the credits it can claim, commonly after a refund, discount or bad debt write-off.View term →
- Special arrangementsDepositA deposit is an amount paid in advance. GST treatment depends on whether it is part payment of the price, in which case GST generally applies, or security that is only taxed if forfeited.View term →
- Assets and depreciationDepreciating assetA depreciating asset is an asset with a limited effective life that is expected to lose value through use, such as machinery, vehicles and equipment, and its cost can be deducted over time.View term →
- InternationalDigital products and servicesDigital products and services are intangible items delivered electronically, such as apps, streaming, downloads and online software, and overseas suppliers selling them to Australians may need to charge GST.View term →
- ConceptsDigital service providerA digital service provider is a business that supplies digital services or software, and in the ATO context it often means a software developer whose products connect to ATO systems for lodgment and reporting.View term →
- Assets and depreciationDiminishing value methodThe diminishing value method gives larger depreciation deductions in the early years by applying a fixed percentage each year to the asset's remaining value instead of its original cost.View term →
- Indirect taxesDirect taxA direct tax is charged directly on a person's or entity's income, profits or wealth, such as income tax, and is paid by the taxpayer who earns the income.View term →
- ComplianceDirector penalty noticeA director penalty notice makes company directors personally liable for certain unpaid company tax debts, such as PAYG withholding, super guarantee charge and GST, unless they act within the notice period.View term →
- Business structuresDiscretionary trustA discretionary trust, often called a family trust, is a trust where the trustee decides each year how much income or capital each beneficiary receives, within the limits set by the deed.View term →
- Income taxDividendA dividend is a distribution of a company's profits to its shareholders, which is included in the shareholder's assessable income and may carry franking credits.View term →
- GST coreDivision 129Division 129 is the part of the GST law that requires or allows you to adjust GST credits when your actual use of a purchase turns out differently from what you first expected.View term →
- ConceptsDonationA donation is a voluntary gift of money or property given without receiving anything of real value in return, and it is generally not subject to GST.View term →
- InternationalDuty freeDuty free refers to goods sold to travellers without customs duty and, in the case of departure sales, without GST, usually through licensed shops at international airports and ports.View term →
E
- Common GST categoriesEducation courseAn education course is a structured program of learning that is GST-free when it meets the requirements of the GST law, such as school, vocational, university and certain other accredited courses.View term →
- Assets and depreciationEffective lifeEffective life is the period an asset can be expected to be useful for earning income, and it is used to work out how quickly its cost is deducted as depreciation.View term →
- InternationalElectronic distribution platformAn electronic distribution platform is an online marketplace or app store that facilitates sales between sellers and buyers, and in some cases the platform operator is treated as the supplier for GST.View term →
- EmploymentEmployeeAn employee is a person who works under a contract of service, is paid for their work, and is generally entitled to PAYG withholding, super and other statutory protections.View term →
- EmploymentEmployee or contractorWhether a worker is an employee or a contractor is decided by the real nature of the working relationship, and it determines PAYG withholding, super and GST obligations.View term →
- EmploymentEmployerAn employer is a person or business that pays others for their work as employees, and has obligations for PAYG withholding, superannuation, reporting and record keeping.View term →
- GST coreEnterpriseFor GST purposes an enterprise is an activity done in the form of a business or similar commercial activity, and it is central to who must register, charge GST and claim credits.View term →
- FBTEntertainmentFor tax purposes, entertainment means food, drink, recreation or accommodation provided for enjoyment, and it has special rules for income tax deductions, GST credits and fringe benefits tax.View term →
- RegistrationEntityFor tax and GST purposes an entity is any person or organisation that can carry on a business or earn income, including individuals, companies, partnerships, trusts and super funds.View term →
- Indirect taxesExcise dutyExcise duty is a federal tax on certain goods made in Australia, such as fuel, alcohol and tobacco, which is built into the price and also attracts GST.View term →
- FBTExempt benefitAn exempt benefit is a benefit provided to an employee that is not subject to fringe benefits tax because it meets conditions set by law, such as certain work-related items or minor benefits.View term →
- Income taxExempt incomeExempt income is income that is specifically declared exempt from income tax by law, so it is not taxed, although it may still affect some calculations such as tax losses.View term →
- FBTExpense payment benefitAn expense payment benefit arises when an employer pays, or reimburses, an expense that an employee has incurred, typically a private expense, and the benefit can attract fringe benefits tax.View term →
- InternationalExportAn export is a supply of goods or services to a customer outside Australia, which is generally GST-free if the conditions are met, while still allowing credits on related purchases.View term →
- Common GST categoriesExports of goodsExports of goods are goods sent out of Australia to overseas customers, and they are generally GST-free when the export conditions are met, which lets the seller claim credits on related costs.View term →
F
- ComplianceFailure to lodge penaltyThe failure to lodge penalty is charged by the ATO when a BAS, tax return or similar document is lodged after its due date, and it builds up for each 28-day period it remains outstanding.View term →
- ConceptsFair market valueFair market value is the price that a willing buyer and a willing seller, dealing independently and with reasonable knowledge, would agree for an asset or service in an open market.View term →
- PropertyFarmland supplyA farmland supply is the sale of land used for farming that can be GST-free if the buyer intends to keep farming it and the other conditions, including a written agreement, are met.View term →
- FBTFBT yearThe FBT year is the period from 1 April to 31 March, used to work out and report fringe benefits tax, and it differs from the income tax year that ends on 30 June.View term →
- Common GST categoriesFinancial supplyA financial supply is an input-taxed supply such as lending, holding deposits or trading shares, so no GST is charged on it and the supplier generally cannot claim credits on related costs.View term →
- ConceptsFinancial yearIn Australia the financial year runs from 1 July to 30 June, and it is the period used for individual income tax returns, most business income tax and many reporting obligations.View term →
- Invoices and recordsFive-year ruleThe five-year rule is the general requirement that businesses keep most tax and GST records for five years, so they are available if the ATO reviews or audits the relevant period.View term →
- DeductionsFixed rate methodThe fixed rate method is a simplified way to claim working from home running costs by multiplying actual hours worked at home by a per-hour rate set by the ATO.View term →
- Income taxForeign residentA foreign resident for tax purposes is someone who does not meet the Australian residency tests, and is generally taxed only on Australian-sourced income at different rates, with no tax-free threshold.View term →
- Income taxFranking creditA franking credit is a credit attached to a dividend that represents company tax already paid, which shareholders can use to reduce their own income tax.View term →
- ConceptsFreightFreight is the cost of moving goods from one place to another, and its GST treatment depends on whether the transport is domestic, international or part of the sale of the goods.View term →
- FBTFringe benefitA fringe benefit is a payment or benefit provided to an employee, or their associate, in connection with their employment, other than salary or wages, and it may attract fringe benefits tax.View term →
- FBTFringe benefits tax (FBT)Fringe benefits tax is a separate tax paid by employers on certain non-cash benefits provided to employees or their associates, assessed for the year from 1 April to 31 March.View term →
- Indirect taxesFuel tax creditsFuel tax credits give eligible businesses a credit for the fuel tax included in the price of fuel used in machinery, equipment and certain heavy vehicles, claimed through the BAS.View term →
G
- BAS and reportingG1 total salesG1 on the BAS is the field where you report your total sales for the period, including GST, covering taxable, GST-free and other sales made in the course of your enterprise.View term →
- BAS and reportingG10 capital purchasesG10 on the BAS is where you report the GST-inclusive cost of capital purchases, such as equipment, vehicles and other assets bought for use in your business over time.View term →
- BAS and reportingG11 non-capital purchasesG11 on the BAS is where you report the GST-inclusive cost of everyday business purchases and expenses that are not capital items, such as stock, rent, supplies and services.View term →
- Special arrangementsGamblingGambling is a special area of GST where operators generally account for GST on their margin, the amounts taken in less the winnings paid out, rather than on each bet.View term →
- DeductionsGeneral deductionsGeneral deductions are the everyday expenses you can claim under the main deduction rule if they are incurred in earning assessable income or running a business and are not private, capital or related to exempt income.View term →
- ComplianceGeneral interest charge (GIC)The general interest charge is interest the ATO applies to unpaid tax debts and some late amounts. It is calculated daily, and the rate is set by the ATO and changes regularly.View term →
- ConceptsGeneral ledgerThe general ledger is the master record of all your business's financial accounts, where every transaction is recorded and from which the profit and loss statement and balance sheet are produced.View term →
- Common GST categoriesGift-deductible recipientA gift-deductible recipient is an organisation endorsed to receive donations that donors can claim as tax deductions, and it may also qualify for certain GST concessions.View term →
- GST coreGiftsA gift is something given with nothing expected in return, and a genuine gift is not a taxable supply for GST, though a business can still claim credits on items it buys to give away.View term →
- PropertyGoing concernA going concern is a business sold as an operating enterprise, and its sale can be GST-free if the buyer is registered and the seller supplies everything needed to keep operating, with a written agreement.View term →
- GST coreGoods and Services Tax (GST)GST is a broad-based tax of 10% on most goods, services and other things sold or consumed in Australia, collected by registered businesses and passed on to the Australian Taxation Office.View term →
- Common GST categoriesGovernment entityA government entity is a department, agency or authority of the Commonwealth, a state, a territory or local government, and it can have GST rights and obligations like other entities.View term →
- ConceptsGrantA grant is money or funding given by a government or organisation for a purpose, and its GST treatment depends on whether the payer receives something in return.View term →
- ConceptsGross profitGross profit is your sales minus the direct cost of the goods or services sold, showing how much is left to cover overheads and produce a net profit.View term →
- FBTGross-up rateA multiplier used in fringe benefits tax to convert the taxable value of a benefit into the pre-tax salary an employee would have needed to earn to buy it.View term →
- ATO and administrationGST ActThe GST Act is the common shorthand for A New Tax System (Goods and Services Tax) Act 1999, the federal law that governs how GST is charged, claimed and reported in Australia.View term →
- GST coreGST adjustmentA GST adjustment is a correction made on a Business Activity Statement to the GST originally reported on a sale or purchase because something has changed, such as a refund, discount or change in use.View term →
- Special arrangementsGST branchA GST branch is a separately identifiable part of a business, such as a division or location, that can be registered for GST separately from the main entity.View term →
- RegistrationGST cancellationGST cancellation is the process of cancelling your GST registration with the ATO when you stop carrying on an enterprise or your turnover is, and is expected to stay, below the registration threshold.View term →
- ConceptsGST codeA GST code is the specific setting in accounting software, such as GST on income or GST-free expense, that tells the system how to calculate and report GST on a transaction.View term →
- ATO and administrationGST DeterminationA GST Determination is a formal ATO instrument that sets out how a particular GST rule or calculation is to be applied, often giving a specific method or answer that taxpayers can rely on.View term →
- GST coreGST fractionThe GST fraction is 1/11, the proportion of a GST-inclusive price that is GST. Multiplying a taxable, GST-inclusive amount by it gives the GST contained in that amount.View term →
- Special arrangementsGST groupA GST group lets closely related entities register as one for GST, with a single representative member lodging one BAS and dealings between members generally ignored for GST purposes.View term →
- Accounting methodsGST instalmentA GST instalment is a quarterly payment option for eligible small businesses, who pay an ATO-calculated amount each quarter and then report their actual GST once a year.View term →
- Special arrangementsGST joint ventureA GST joint venture is a written arrangement for a shared project, such as mining or property development, where an operator accounts for GST on behalf of all participants.View term →
- InternationalGST on imported goodsGST on imported goods is 10% of the value of the taxable importation, collected at the border or reported on the BAS, and registered businesses can generally claim it back as a credit.View term →
- GST coreGST payableGST payable is the amount of GST you owe the ATO for a reporting period, being the GST you collected on sales minus the GST credits you can claim on purchases.View term →
- GST coreGST refundA GST refund arises when the GST credits on your purchases exceed the GST on your sales for a period, and the ATO may pay the difference to you after processing your BAS.View term →
- RegistrationGST registration thresholdThe GST registration threshold is the turnover level at which a business must register for GST: $75,000 for most businesses and $150,000 for non-profit organisations.View term →
- BAS and reportingGST reporting cycleThe GST reporting cycle is how often a registered business reports its GST to the ATO, usually quarterly, but monthly or annual depending on turnover and election.View term →
- ComplianceGST rulingA GST ruling is a public ruling issued by the ATO that sets out its view on how the GST law applies, binding the Commissioner for those who rely on it correctly.View term →
- GST coreGST turnoverGST turnover is the total value of your business sales, excluding GST and certain items such as input-taxed sales, which is used to decide whether you must register for GST.View term →
- GST coreGST-exclusive priceA GST-exclusive price is the price before GST is added, so you multiply it by 1.1 to find what the customer will pay, with GST being 10 per cent of the exclusive amount.View term →
- GST coreGST-free supplyA GST-free supply is a sale on which no GST is charged to the customer, but the seller can still claim input tax credits for the GST included in the costs of making it.View term →
- GST coreGST-inclusive priceA GST-inclusive price is the total price that already contains the 10 per cent GST, and the GST part is one-eleventh of that total.View term →
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- Common GST categoriesHealth servicesHealth services are medical, dental, allied health and similar services that are GST-free when supplied by recognised practitioners and generally accepted as necessary for treating an ailment.View term →
- DeductionsHome office expensesHome office expenses are the costs of working from home, such as electricity, internet and equipment, which can be claimed using the fixed rate method or the actual cost method.View term →
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- InternationalImportAn import is the bringing of goods into Australia from overseas, which can involve GST, customs duty and border processes, and may also include certain services and digital products.View term →
- InternationalImported servicesImported services are services and other intangible supplies bought from a supplier outside Australia, which can carry GST through the reverse charge or through the overseas supplier registering for GST.View term →
- PAYGIncome statementAn income statement is the ATO record of your employment income and tax withheld, reported by employers through Single Touch Payroll and used to complete your tax return.View term →
- Income taxIncome taxIncome tax is a tax on the taxable income of individuals, companies and other entities, calculated each year after deducting allowable expenses from assessable income.View term →
- ATO and administrationIncome Tax Assessment ActThe Income Tax Assessment Act refers to the federal Acts that set out how income tax is calculated in Australia, including assessable income, deductions, losses and offsets.View term →
- ConceptsIncome yearThe income year is the period for which income tax is worked out, which for most Australian taxpayers is the 12 months from 1 July to 30 June.View term →
- GST coreIncreasing adjustmentAn increasing adjustment is a GST adjustment that increases the GST a business must pay or reduces the credits it can claim, usually because a purchase price fell or its business use declined.View term →
- EmploymentIndependent contractorAn independent contractor is a worker who runs their own business, supplies services to clients for a fee, and is not an employee of any of them.View term →
- Indirect taxesIndirect taxAn indirect tax is a tax charged on transactions or goods, such as GST, excise or customs duty, collected by businesses and passed to the government rather than paid directly on a person's income.View term →
- GST coreInput tax creditAn input tax credit is the amount of GST included in the price of business purchases that a GST-registered business can claim back on its Business Activity Statement.View term →
- GST coreInput-taxed supplyAn input-taxed supply is a sale on which the seller charges no GST and cannot claim input tax credits for the GST included in the costs of making it.View term →
- ATO and administrationInspector-General of TaxationThe Inspector-General of Taxation is an independent statutory office that reviews how Australia's tax system is administered and recommends improvements, and which also handles complaints about the tax authorities as Taxation Ombudsman.View term →
- Accounting methodsInstalment amountAn instalment amount is the set payment you make towards a tax liability during the year, such as GST or PAYG instalments, instead of paying everything in one lump sum.View term →
- PAYGInstalment incomeInstalment income is the business and investment income you earn in a period that is used to calculate your PAYG instalment, and it generally excludes GST.View term →
- Accounting methodsInstalment noticeAn instalment notice is the ATO document, usually sent each quarter, that tells you how much you must pay as a GST or PAYG instalment and when it is due.View term →
- PAYGInstalment rateThe instalment rate is the percentage the ATO gives you to multiply by your instalment income each period to work out your PAYG instalment.View term →
- Assets and depreciationInstant asset write-offThe instant asset write-off lets eligible small businesses deduct the full cost of a qualifying asset in the year it is first used, if the cost is below a threshold set by the government.View term →
- Special arrangementsInsuranceFor GST, general insurance premiums generally include GST, while some other types, such as life insurance and private health insurance, are treated differently. Claim payments have their own rules.View term →
- Income taxInterest incomeInterest income is the amount earned from lending money or holding it in accounts such as savings and term deposits, and it is assessable income in the year it is received or credited.View term →
- Common GST categoriesInternational transportInternational transport covers the carriage of passengers or goods between Australia and overseas, and these services are generally GST-free, unlike purely domestic transport.View term →
- Invoices and recordsInvoiceAn invoice is a commercial document a seller gives a buyer requesting payment and listing what was sold and the price, and it becomes a tax invoice only if it meets the GST requirements.View term →
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- BAS and reportingLabel 1ALabel 1A on the BAS is the field where you report the total GST you collected, or are liable to pay, on your sales and other taxable supplies for the period.View term →
- BAS and reportingLabel 1BLabel 1B on the BAS is the field where you report the total GST credits you are claiming on business purchases and expenses for the period.View term →
- State and territory taxesLand taxLand tax is an annual state and territory tax on the value of land you own above a threshold, administered by state revenue offices, with exemptions and rates that vary by jurisdiction.View term →
- Special arrangementsLaybyA layby lets a customer pay for goods by instalments before taking them home. GST on a layby sale follows special timing rules, so it is not always reported as each instalment arrives.View term →
- PropertyLeaseA lease is an agreement giving someone the right to occupy or use property for a period in return for rent, and its GST treatment depends on whether the property is residential or commercial.View term →
- ATO and administrationLegislationLegislation is the written law made by Parliament, such as Acts and the regulations under them, which sets out who pays tax, how much, and what the Australian Taxation Office can and cannot do.View term →
- BAS and reportingLodgmentLodgment is the formal submission of a tax document, such as a BAS or income tax return, to the ATO, and it is a separate obligation from paying any amount owing.View term →
- BAS and reportingLodgment deferralA lodgment deferral is extra time granted by the ATO to submit a return or statement after the normal due date, usually because of exceptional circumstances or an agent's lodgment program.View term →
- DeductionsLogbook methodThe logbook method calculates the business share of car costs from a logbook kept over at least 12 continuous weeks, then applies that percentage to the car's actual running costs.View term →
- InternationalLow value imported goodsLow value imported goods are goods valued at $1,000 or less bought from overseas by consumers, where the overseas seller or platform generally must charge GST at the point of sale.View term →
- Assets and depreciationLow-value poolA low-value pool lets a taxpayer group assets of low cost or low remaining value together and deduct them at 18.75% in the first year and 37.5% each year after.View term →
- Indirect taxesLuxury car tax (LCT)Luxury car tax is a 33% tax on the part of a car's value above the luxury car tax threshold, paid by the dealer or importer and usually built into the price.View term →
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- Capital gainsMain residence exemptionThe main residence exemption disregards a capital gain or loss on the home you live in, provided it was your main residence for the whole time you owned it and the land is within size limits.View term →
- PropertyMargin schemeThe margin scheme is a way of calculating GST on certain property sales so GST is one-eleventh of the margin (the profit element) rather than one-eleventh of the full sale price.View term →
- Income taxMarginal tax rateYour marginal tax rate is the rate of tax you pay on the next dollar of taxable income you earn, which depends on the bracket your income falls into.View term →
- ConceptsMarket valueMarket value is the price an asset or service would reasonably be expected to fetch in an open sale between informed, willing and independent buyers and sellers.View term →
- Capital gainsMaximum net asset value testThe maximum net asset value test is one way to qualify for the small business CGT concessions, requiring that your net assets and those of connected entities stay below a legislated limit.View term →
- SuperannuationMaximum super contribution baseThe maximum super contribution base is the cap on an employee's quarterly ordinary time earnings above which an employer is not required to pay super guarantee contributions.View term →
- FBTMeal entertainmentMeal entertainment is food or drink provided at restaurants, functions or similar occasions, and it has special valuation methods and rules for fringe benefits tax, deductions and GST credits.View term →
- Common GST categoriesMedical aids and appliancesMedical aids and appliances are items listed in the GST law, such as wheelchairs, hearing aids and prescription glasses, that are GST-free when supplied to help people with disabilities or health conditions.View term →
- Income taxMedicare levyThe Medicare levy is a charge on taxable income, generally 2%, that helps fund Australia's public health system, paid by most resident taxpayers with their income tax.View term →
- Income taxMedicare levy surchargeThe Medicare levy surcharge is an extra charge on higher income earners who do not hold appropriate private hospital insurance, separate from the standard Medicare levy.View term →
- ConceptsMembership feesMembership fees are payments made to join or stay in a club, association or organisation, and GST applies if the organisation is registered and the fee is for a taxable supply.View term →
- FBTMinor benefits exemptionThe minor benefits exemption removes fringe benefits tax on a benefit of low value that is provided infrequently and irregularly, subject to a threshold set by law.View term →
- GST coreMixed supplyA mixed supply is a sale that bundles items with different GST treatments, such as taxable and GST-free parts, so the GST is worked out on the taxable part only.View term →
- BAS and reportingMonthly BASA monthly BAS is a Business Activity Statement lodged every month, required for businesses above a high turnover threshold and available by choice to others who want faster refunds or tighter control.View term →
- ATO and administrationmyGovmyGov is the Australian Government's online account that lets individuals link services such as the ATO, Medicare and Centrelink. Businesses typically use separate online services for business.View term →
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- Income taxNet business incomeNet business income is the profit of a business for tax purposes, being business income less the deductible expenses of running the business, which is reported in the owner's tax return.View term →
- Capital gainsNet capital gainThe net capital gain is the amount left after applying capital losses and any CGT discount to your total capital gains for the year, and it is added to your assessable income.View term →
- BAS and reportingNet GST amountThe net GST amount is the GST you collected on sales minus the GST credits you can claim on purchases, and it determines whether you pay the ATO or receive a refund.View term →
- ConceptsNet profitNet profit is what remains of your income after all business expenses, including overheads and depreciation, have been subtracted, and it is the starting point for working out income tax.View term →
- PropertyNew residential premisesNew residential premises are newly built, substantially renovated or replacement homes, and their first sale is generally subject to GST, unlike the sale of established homes which is input-taxed.View term →
- BAS and reportingNil BASA nil BAS is a Business Activity Statement lodged with zero amounts because the business had no GST sales, purchases or other reportable activity during the period.View term →
- PAYGNo-ABN withholdingNo-ABN withholding is the tax a business must withhold from a payment to a supplier who has not quoted an ABN, at the top marginal rate plus Medicare levy, and then pay to the ATO.View term →
- Income taxNon-assessable incomeNon-assessable income, more fully non-assessable non-exempt income, is income that the law says is not taxed and is not counted in assessable income.View term →
- Common GST categoriesNon-commercial activitiesNon-commercial activities of charities and similar organisations, such as selling goods or services well below market value, can be GST-free, which reduces GST on genuine community support.View term →
- SuperannuationNon-concessional contributionA non-concessional contribution is a super contribution made from after-tax money, for which no deduction is claimed, and it is limited by an annual cap.View term →
- InternationalNon-residentA non-resident is a person or entity that is not an Australian resident, and the term matters for GST when working out where a supply is connected and who must register.View term →
- Income taxNotice of assessmentA notice of assessment is the document the ATO issues after processing your tax return, showing your taxable income, tax payable and whether you receive a refund or owe a debt.View term →
- FBTNovated leaseA novated lease is a three-party arrangement in which an employee's car lease is transferred to the employer, who makes lease and running cost payments from the employee's salary.View term →
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- ComplianceObjectionAn objection is a formal written challenge to an ATO decision, such as an assessment or penalty, lodged within a set time and considered by an officer independent of the original decision.View term →
- InternationalOffshore supplierAn offshore supplier is a business based outside Australia that sells goods or services to Australian customers, and it may need to register for and charge GST depending on what it sells.View term →
- GST coreOne-eleventh ruleThe one-eleventh rule is the shortcut for finding the GST inside a GST-inclusive price: divide the total by 11, and the result is the GST component of that price.View term →
- ConceptsOnline marketplaceAn online marketplace is a website or app where independent sellers list goods or services, and GST responsibilities can fall on both the sellers and, in some cases, the marketplace operator.View term →
- BAS and reportingOnline services for businessOnline services for business is the ATO's secure portal where businesses can lodge BAS, view accounts, update details and communicate with the ATO digitally.View term →
- FBTOperating cost methodThe operating cost method values a car fringe benefit using the car's actual running costs for the year, reduced by the business-use percentage shown in a logbook.View term →
- SuperannuationOrdinary time earningsOrdinary time earnings are the amounts an employee earns for their ordinary hours of work, and they are generally the base on which employers calculate super guarantee contributions.View term →
- BAS and reportingOverdue BASAn overdue BAS is a Business Activity Statement that has not been lodged by its due date, which can lead to penalties, interest and further ATO action if left unresolved.View term →
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- GST corePartial creditable purposePartial creditable purpose describes a purchase used partly for business activities that carry GST credits and partly for private or input-taxed purposes, so only part of the GST is claimable.View term →
- Business structuresPartnershipA partnership is a business structure in which two or more people or entities carry on a business together with a view to profit, sharing income, losses and liability.View term →
- ConceptsPay-by-phonePay-by-phone describes paying for goods or services, such as parking or a bill, by phone call, SMS or app, where GST depends on the underlying supply and any service fee added.View term →
- PAYGPAYG instalmentsPAYG instalments are regular prepayments of income tax, made during the year by businesses and investors based on their expected income, instead of paying everything when the tax return is assessed.View term →
- PAYGPAYG withholdingPAYG withholding is the system where employers and certain payers deduct income tax from payments such as wages and send it to the ATO on behalf of the worker.View term →
- Special arrangementsPayment of damagesDamages are compensation for loss or harm. They are generally not payment for a supply, so no GST applies, but some payments labelled damages can be consideration for a supply.View term →
- CompliancePayment planA payment plan is an arrangement with the ATO to pay a tax debt in instalments over time. Interest generally continues to accrue, and the plan depends on keeping up with payments and lodgments.View term →
- PAYGPayment summaryA payment summary is a statement of the payments an employer or payer made to a worker during the year and the tax withheld, used by the worker to prepare their tax return.View term →
- State and territory taxesPayroll taxPayroll tax is a state and territory tax on wages paid by employers above a threshold, administered by state revenue offices, not the ATO, and it varies by jurisdiction.View term →
- CompliancePenaltyA penalty is a financial charge imposed by the ATO for breaching tax obligations, such as lodging late, understating tax or failing to keep records. Amounts are set by legislation and can change.View term →
- EmploymentPersonal services incomePersonal services income is income earned mainly as a reward for an individual's personal efforts or skills, and special rules limit the deductions and income splitting available.View term →
- CompliancePhoenixingPhoenixing is when a company is deliberately wound up to avoid paying debts, such as tax, and its business continues through a new company. Illegal phoenix activity is targeted by regulators.View term →
- PropertyPotential residential landPotential residential land is vacant or partly built land that is permitted to be used for residential premises, and its sale by a registered seller is generally taxable rather than input-taxed.View term →
- ATO and administrationPractical compliance guidelineA practical compliance guideline is ATO guidance that explains how the ATO will allocate its compliance resources and, in some cases, sets out approaches it considers lower risk.View term →
- Common GST categoriesPrecious metalsPrecious metals such as investment grade gold, silver and platinum have special GST treatment: the first supply by a refiner is GST-free, and later dealings are generally input-taxed.View term →
- DeductionsPrepaid expenseA prepaid expense is a cost paid in advance for goods or services to be provided later, and its income tax deduction timing depends on the period it covers and your business type.View term →
- GST corePrice displayPrice display covers how businesses show prices to customers, and for consumers the displayed price generally has to be a single, GST-inclusive total rather than an exclusive price plus extras.View term →
- Assets and depreciationPrime cost methodThe prime cost method spreads an asset's cost evenly over its effective life, giving the same deduction each year based on a fixed percentage of the original cost.View term →
- GST corePrivate or domestic acquisitionA private or domestic acquisition is a purchase made for personal or household use, which is not for a creditable purpose, so no GST credit can be claimed for it.View term →
- CompliancePrivate rulingA private ruling is the ATO's written opinion on how a tax law applies to your specific circumstances, and it is binding on the ATO if you rely on it correctly.View term →
- DeductionsPrivate usePrivate use is when something bought for a business is also used for personal purposes, which reduces both the income tax deduction and the GST credits you can claim.View term →
- GST corePrivate use adjustmentA private use adjustment is a correction to GST credits when a business asset ends up being used privately more than first expected, which reduces the credit that can be kept.View term →
- ConceptsPrizeA prize is something of value won in a competition or draw, and its GST and income tax treatment depends on who provides it and whether the winner is in business.View term →
- Special arrangementsProgressive supplyA progressive or periodic supply is one delivered or paid for in stages over time, such as construction work or a long contract, with GST accounted for as each stage is invoiced or paid.View term →
- GST coreProjected GST turnoverProjected GST turnover is your expected GST turnover for the current month and the next 11 months, used to work out whether you must register for GST before you actually reach the threshold.View term →
- CompliancePublic rulingA public ruling is the ATO's published view on how tax law applies generally. It binds the Commissioner and protects taxpayers who follow it in the circumstances it covers.View term →
- Invoices and recordsPurchase orderA purchase order is a document a buyer sends to a supplier requesting goods or services at an agreed price, and it is a useful internal record but not a tax invoice.View term →
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- PropertyReal propertyReal property in GST is land, any interest in land such as a lease or licence to occupy, and buildings fixed to land, and its GST treatment depends on type and use.View term →
- Invoices and recordsReceiptA receipt is a document that confirms a payment has been made, showing what was bought, when, and for how much, but it is not automatically a tax invoice for GST purposes.View term →
- Invoices and recordsRecipient created tax invoice (RCTI)A recipient created tax invoice is a tax invoice that the buyer issues on behalf of the supplier under a written agreement, so the supplier does not issue its own tax invoice for those sales.View term →
- ConceptsReconciliationReconciliation is the process of comparing your accounting records with an outside source, usually a bank statement, to confirm that they match and to find any errors or missing transactions.View term →
- Invoices and recordsRecord keepingRecord keeping is the process of creating and storing the documents that explain your income, expenses and GST so you can lodge accurately and prove your figures to the ATO.View term →
- Capital gainsReduced cost baseThe reduced cost base is a variation of the cost base used only to work out a capital loss, and it leaves out certain elements that the ordinary cost base includes.View term →
- BAS and reportingRegistered BAS agentA registered BAS agent is a person or firm registered with the Tax Practitioners Board to provide BAS services, such as preparing and lodging BAS, for a fee.View term →
- RegistrationRegistered for GSTBeing registered for GST means the ATO has recorded your business as a GST entity, so you must charge GST on taxable sales, lodge BAS and can claim input tax credits on business purchases.View term →
- Common GST categoriesReligious servicesReligious services supplied by a religious institution, such as worship, ceremonies and pastoral care, can be GST-free, while commercial activities run by religious organisations are generally taxable.View term →
- PropertyRentRent is the regular payment made for the use of property, and residential rent is input-taxed with no GST, while commercial rent from a registered landlord is generally taxable.View term →
- FBTReportable fringe benefits amountThe reportable fringe benefits amount is the grossed-up value of certain fringe benefits shown on an employee's income statement, which is not taxed but counts towards some income tests.View term →
- GST coreReporting periodA reporting period is how often you report GST and other amounts to the ATO, such as monthly, quarterly or annually, and it decides which dates your BAS is due.View term →
- PropertyResidential premisesResidential premises are land or buildings occupied, or intended to be occupied, as a residence or for residential accommodation, and sales of established ones and residential rent are generally input-taxed.View term →
- DeductionsRevenue expenditureRevenue expenditure is the everyday cost of running a business, such as wages, rent, stock and repairs, which is generally deductible in the year it is incurred.View term →
- InternationalReverse chargeThe reverse charge shifts the responsibility to pay GST from an overseas supplier to the Australian recipient, but only in limited situations where the purchase is not wholly for a creditable purpose.View term →
- ComplianceReviewA review can mean a lighter-touch ATO check of a taxpayer's affairs, or a process by which an ATO decision is looked at again, internally or by an independent body.View term →
- ConceptsRide-sourcingRide-sourcing is the ATO's term for arranging a paid passenger trip through an app or similar facility, and drivers providing it must register for GST regardless of their turnover.View term →
- ConceptsRidesharingRidesharing is the practice of using an app to connect a driver and a passenger for a paid trip in a private vehicle, and for GST the driver is treated like a taxi operator.View term →
- Capital gainsRolloverA rollover is a tax concession that defers or postpones a capital gain or loss when an asset is transferred or replaced, rather than removing the tax permanently.View term →
- GST coreRoundingRounding is how GST amounts are adjusted to whole cents on invoices and, where permitted, to whole dollars on the BAS, so figures reconcile cleanly without mistaken adjustments.View term →
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- FBTSalary packagingSalary packaging, also called salary sacrifice, is an arrangement where an employee agrees to receive some of their pay as benefits instead of cash, which can change the tax treatment.View term →
- Special arrangementsSecond-hand goodsSecond-hand goods are used items resold in business. A registered business buying them from a non-registered seller can sometimes claim a credit even though no GST was charged.View term →
- SuperannuationSelf-managed super fund (SMSF)A self-managed super fund is a private super fund with a small number of members who are also its trustees, giving them control of investments and responsibility for compliance.View term →
- ConceptsSharing economyThe sharing economy covers activities where people earn income through online platforms by offering services or assets, such as ride-sourcing and short-term accommodation, and these activities can have tax and GST consequences.View term →
- ConceptsShort-term accommodationShort-term accommodation is a paid stay for a limited period, such as a holiday rental or room booking, and its GST treatment depends on the type of premises and the host's registration status.View term →
- ComplianceShortfall interest charge (SIC)The shortfall interest charge is a lower-rate interest charge applied when an amended income tax assessment shows more tax is payable than originally assessed.View term →
- ComplianceShortfall penaltyA shortfall penalty is charged when a false or misleading statement leads to too little tax being paid. The percentage depends on how careless or deliberate the error was.View term →
- Accounting methodsSimpler BASSimpler BAS is a reduced reporting option for eligible small businesses, which report fewer GST labels, such as total sales, GST on sales and GST on purchases, instead of the full set.View term →
- Invoices and recordsSimplified tax invoiceA simplified tax invoice is an informal name for a short-form tax invoice, such as a retail receipt, showing the seller's details, date, description and GST for lower-value sales without the buyer's details.View term →
- PAYGSingle Touch Payroll (STP)Single Touch Payroll is the ATO reporting system in which employers send payroll information, such as wages, tax withheld and super, to the ATO each time they pay their staff.View term →
- Capital gainsSmall business CGT concessionsThe small business CGT concessions are a set of four concessions that can reduce, defer or eliminate a capital gain on business assets if strict eligibility conditions are met.View term →
- ConceptsSmall business entityA small business entity is a business that meets the aggregated turnover test, which allows it to access a range of simplified income tax concessions available to small businesses.View term →
- ConceptsSmall business income tax offsetThe small business income tax offset is a reduction in tax payable for eligible individuals who receive income from an unincorporated small business, calculated as a percentage of the tax on that income.View term →
- Assets and depreciationSmall business poolThe small business pool is a simplified depreciation method where eligible assets are grouped together and deducted at set rates, 15% in the first year and 30% in later years.View term →
- ConceptsSmall business restructure rolloverThe small business restructure rollover lets eligible small businesses transfer assets to a new structure without triggering an immediate income tax or capital gains tax liability, provided conditions are met.View term →
- Business structuresSole traderA sole trader is an individual who runs a business in their own name, with no separate legal entity, and who is personally responsible for the business's income, debts and tax.View term →
- Invoices and recordsSource documentsSource documents are the original records, such as invoices, receipts, bank statements and contracts, that prove a transaction happened and support the figures in your accounts and BAS.View term →
- ConceptsSponsorshipSponsorship is a payment to an organisation or event in return for promotion or other benefits, and it is generally a taxable supply by a registered recipient.View term →
- State and territory taxesStamp dutyStamp duty is a state and territory tax on certain transactions, most commonly property and vehicle transfers, administered by state revenue offices, with rates and concessions that vary by jurisdiction.View term →
- FBTStatutory formula methodThe statutory formula method values a car fringe benefit using the car's base value multiplied by a fixed statutory fraction, reduced for days not available and employee contributions.View term →
- DeductionsStocktakeA stocktake is the physical count and valuation of the goods a business holds at a point in time, usually at year end, to work out the value of trading stock.View term →
- ConceptsSubscriptionA subscription is a recurring payment for ongoing access to goods, services or digital content, and GST generally applies if the supply is taxable and the seller is registered.View term →
- ConceptsSubsidyA subsidy is a payment that reduces the cost of something for a buyer or supports a producer, and it may or may not be consideration for a supply under GST.View term →
- DeductionsSubstantiationSubstantiation is the requirement to keep written evidence, such as receipts, logbooks and diaries, to prove certain deductions, especially work-related, car and travel expenses.View term →
- SuperannuationSuper clearing houseA super clearing house is a service that lets an employer make one payment and have it split and sent to each employee's chosen super fund with the correct data.View term →
- SuperannuationSuper contributionA super contribution is money paid into a super fund for a person, either by an employer, by the individual or by someone else, and it is subject to caps and tax rules.View term →
- SuperannuationSuper fundA super fund is an organisation or trust that receives, invests and pays out superannuation savings on behalf of its members, to provide for their retirement.View term →
- SuperannuationSuper guarantee chargeThe super guarantee charge is what an employer owes the ATO when super is not paid in full and on time: the shortfall, interest and an administration amount, none of it deductible.View term →
- SuperannuationSuperannuation guaranteeThe superannuation guarantee is the law requiring employers to pay a minimum percentage of an eligible employee's ordinary time earnings into a super fund, to help fund their retirement.View term →
- SuperannuationSuperannuation Guarantee rateThe Superannuation Guarantee rate is the percentage of ordinary time earnings that employers must pay as super guarantee, set by legislation and changed over time.View term →
- GST coreSupplyA supply is anything you provide to another party, such as goods, services, advice, rights or a grant of property, and it is the basic event on which GST is charged.View term →
- ConceptsSurchargeA surcharge is an extra amount added to a price, such as a card or public holiday fee, and it is generally part of the price for GST purposes.View term →
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- BAS and reportingTax agentA tax agent is a professional registered with the Tax Practitioners Board who can prepare and lodge tax returns and give tax advice for a fee.View term →
- ATO and administrationTax Agent Services ActThe Tax Agent Services Act is the federal law that regulates who can provide tax agent and BAS services for a fee, and sets registration, qualification and conduct requirements for them.View term →
- ComplianceTax avoidanceTax avoidance is arranging your affairs mainly to obtain a tax benefit in a way the law is not intended to allow. It differs from legitimate tax planning and from illegal evasion.View term →
- ConceptsTax codeA tax code is a label applied to each transaction in your accounting records to show whether GST applies and how it should be reported, which then feeds into the BAS.View term →
- DeductionsTax deductionA tax deduction is an expense you can subtract from assessable income to reduce taxable income, provided it meets the legal requirements and you have the records to prove it.View term →
- ComplianceTax evasionTax evasion is the deliberate, illegal act of avoiding tax, for example by hiding income, falsifying records or claiming fake expenses. It is a criminal offence with severe penalties.View term →
- PAYGTax file number (TFN)A tax file number is a unique nine-digit number issued by the ATO to an individual or organisation to identify them in the tax and super systems. It is not the same as an ABN.View term →
- Invoices and recordsTax invoiceA tax invoice is a document from a GST-registered seller that shows the details of a taxable sale, and a buyer generally needs one to claim an input tax credit for purchases over $82.50.View term →
- Invoices and recordsTax invoice requirementsTax invoice requirements are the details a document must contain before a buyer can use it to claim a GST credit, such as the seller's ABN, the date, a description and the GST amount.View term →
- Income taxTax lossesA tax loss arises when allowable deductions are greater than assessable income, and it can generally be carried forward to reduce taxable income in later years, subject to conditions.View term →
- Income taxTax offsetA tax offset reduces the amount of income tax you owe directly, dollar for dollar, after your tax has been calculated on your taxable income.View term →
- GST coreTax periodA tax period is the length of time covered by each BAS for GST, most commonly a quarter, but it can be a month or a year for some businesses.View term →
- ATO and administrationTax practitioners boardThe Tax Practitioners Board is the national regulator of tax agents, BAS agents and tax financial advisers, setting registration requirements and a code of professional conduct.View term →
- Income taxTax rates for residentsThe resident tax rates are the progressive income tax rates, set by legislation, that apply to the taxable income of Australian residents for tax purposes, starting with a tax-free threshold.View term →
- Income taxTax returnA tax return is the annual form you lodge with the ATO to report your income, claim deductions and offsets, and have your income tax liability or refund assessed.View term →
- Income taxTax-free thresholdThe tax-free threshold is the amount of annual taxable income on which an Australian resident pays no income tax, which is claimed through the tax rates and through employer withholding.View term →
- ConceptsTax-inclusiveTax-inclusive describes a price that already has GST built in, so the total shown is the amount the customer pays, with one-eleventh of it being GST.View term →
- InternationalTaxable importationA taxable importation is an importation of goods into Australia that attracts GST, as opposed to a non-taxable importation such as goods that would be GST-free or input-taxed if supplied locally.View term →
- Income taxTaxable incomeTaxable income is your assessable income less allowable deductions, and it is the amount on which your income tax is calculated.View term →
- GST coreTaxable purchaseA taxable purchase is something a business buys that includes GST in its price, which the business may be able to claim back as an input tax credit if it is used for the enterprise.View term →
- GST coreTaxable supplyA taxable supply is a sale made in the course of an enterprise by a business registered or required to be registered for GST, connected with Australia, and which is neither GST-free nor input-taxed.View term →
- ATO and administrationTaxation Administration ActThe Taxation Administration Act is federal legislation that sets out many of the common procedures for Australian taxes, including lodgment, record keeping, penalties, interest, rulings and debt recovery.View term →
- ATO and administrationTaxpayers' charterThe Taxpayers' charter is a statement of the standards of service and treatment that taxpayers can expect from the Australian Taxation Office, and the responsibilities taxpayers have in return.View term →
- PAYGTFN declarationA TFN declaration is a form an employee completes to give their employer their tax file number and tax details, so the right amount of PAYG tax is withheld from their pay.View term →
- Special arrangementsThird-party paymentsThird-party payments are amounts paid to a supplier by someone other than the customer, and they usually count as consideration for the supply, so GST can apply to them.View term →
- GST coreTime limit for GST creditsThere is a time limit for claiming GST credits, generally four years from the due date of the BAS for the period in which the credit could first have been claimed.View term →
- GST coreTipsTips are voluntary payments given by customers for good service, and they are generally not subject to GST, whereas compulsory service charges are part of the price and do attract GST.View term →
- InternationalTourist refund schemeThe tourist refund scheme lets eligible travellers claim back GST, and wine equalisation tax, on certain goods bought in Australia and taken out of the country in their carry-on baggage.View term →
- DeductionsTrading stockTrading stock is anything a business produces, manufactures or buys to sell, including partly finished goods and raw materials, and it has special income tax rules at the end of each year.View term →
- InternationalTransfer of valueA transfer of value describes something of worth passing from one party to another, and for GST it matters because consideration can be money or any other benefit, including goods swapped in a barter.View term →
- DeductionsTravel expensesTravel expenses are the costs of travelling away from home for work or business, such as fares, accommodation and meals, which may be deductible if the travel is genuinely work-related.View term →
- Business structuresTrustA trust is an arrangement where a trustee holds assets or runs a business for beneficiaries under a trust deed, with its own tax file number and tax return.View term →
- ConceptsTurnoverTurnover is the total sales or income a business earns over a period, and different tax tests use slightly different versions of it, such as GST turnover or aggregated turnover.View term →
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- PAYGVarying instalmentsVarying instalments means asking to change your PAYG or GST instalment so it better matches your expected tax or GST for the year, usually when your income or circumstances change.View term →
- PAYGVoluntary agreementA voluntary agreement is a written arrangement between a contractor and a payer, registered with the ATO, under which the payer withholds PAYG tax from payments so the contractor avoids a large tax bill later.View term →
- ComplianceVoluntary disclosureA voluntary disclosure is when a taxpayer tells the ATO about an error or omission before being asked, which can lead to reduced penalties and a better compliance outcome.View term →
- RegistrationVoluntary GST registrationVoluntary GST registration is when a business whose turnover is below the registration threshold chooses to register for GST so it can claim input tax credits, accepting the duty to charge GST on sales.View term →
- Special arrangementsVouchersVouchers, such as gift cards, are generally not taxed when sold. GST applies later, when the voucher is redeemed for goods or services that are themselves taxable.View term →
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- BAS and reportingW1 total salary and wagesW1 on the BAS is where you report the total salary, wages and other payments you made to employees and others that are subject to PAYG withholding in the period.View term →
- BAS and reportingW2 amount withheldW2 on the BAS is where an employer reports the total tax withheld from salary, wages and other payments reported at W1 during the period.View term →
- Special arrangementsWarrantyA warranty is a promise to repair or replace goods if they fail. Selling an extended warranty is generally a taxable supply, while GST on warranty repairs depends on who pays.View term →
- Common GST categoriesWater and sewerageWater and sewerage services supplied through the mains network, such as water supply, sewerage and drainage, are GST-free in Australia, while some other water supplies are treated differently.View term →
- Indirect taxesWine equalisation tax (WET)Wine equalisation tax is a 29% tax on the wholesale value of wine sold in Australia, with a producer rebate available to eligible wine makers, and it applies on top of GST.View term →
- PAYGWithholding tax tableA withholding tax table is an ATO schedule that tells an employer how much PAYG tax to withhold from each payment, based on earnings, pay frequency and the worker's declared details.View term →
- PAYGWithholding variationA withholding variation is an ATO-approved change to the amount of tax withheld from a worker's payments, usually to better match their expected tax liability.View term →
- DeductionsWork-related expenseA work-related expense is a cost an employee incurs in earning their income, such as tools, uniforms, travel or training, which may be deductible if the ATO's three rules are met.View term →
- State and territory taxesWorkers compensationWorkers compensation is insurance employers must carry to cover injured employees, arranged under state and territory schemes, not by the ATO, and rules and premiums vary by jurisdiction.View term →
- ConceptsWorking capitalWorking capital is the money available to run your business day to day, calculated as current assets such as cash and receivables minus current liabilities such as bills and GST payable.View term →
- PAYGWorking holiday makerA working holiday maker is a person on a Working Holiday (417) or Work and Holiday (462) visa, taxed under special rates, whose employer must register with the ATO.View term →
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