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  • Company tax and the petroleum resource rent tax

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    Company chapter

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    This chapter provides information on companies, as reported on their income tax returns. A company is a body corporate and, therefore, an 'entity' for the purposes of the Income Tax Assessment Act 1997 and the Taxation Administration Act 1953. For tax purposes, companies include all incorporated and unincorporated bodies or associations, excluding partnerships and non-entity joint ventures. Limited partnerships, some corporate unit trusts and public trading trusts are also treated as companies.

    Depending on the level of their previous year's tax liability, companies pay income tax either in instalments (pay as you go instalments or PAYGI), some of which are paid during that income year, or in a single lump sum paid during the subsequent year. For the majority of companies, the income year is the same as the financial year. However, those companies whose income year is different to the financial year use a substituted accounting period.

    Generally, every resident company that derives assessable income from any source, and every non-resident company that derives assessable income from Australian sources, are required to lodge a company tax return. A resident non-profit company is not required to lodge a return if its taxable income is less than $416.

    Companies pay a flat rate of tax, without a tax-free threshold. As from, and including, the 2001-02 income year, the tax rate for public and private companies is 30%. Other companies such as retirement savings account providers, pooled development funds, credit unions, non-profit companies and life insurance and friendly society companies have various other tax rates.

    OVERVIEW

    For the 2007-08 income year:

    • 772,435 companies lodged returns, a 3.0% increase from 2006-07
    • companies reported total income of $2,264 billion, a 10.8% increase from 2006-07
    • total company expenses were $2,054 billion, a 12.9% increase from 2006-07
    • total assets controlled by companies were $6,056 billion, a 16.0% increase from 2006-07
    • companies were liable for $57.9 billion in net tax, a 0.7% decrease from 2006-07.

    For the 2008-09 financial year:

    • petroleum resource rent tax totalled $1.6 billion.
     
      Last modified: 24 Mar 2010QC 22511