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  • Definitions and calculations

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    Entity size

    For the purposes of our yearly Taxation statistics, an Entity is an individual, a company, a fund, a self-managed fund, a partnership or a trust.

    An entity’s size is determined by referring to Table 21 below.

    Table 21: Determine entity size

    Entity size

    Total business income

    Loss

    less than $0

    Nil

    equal to $0

    Micro

    $1 to less than $2 million

    Small

    $2 million to less than $10 million

    Medium

    $10 million to less than $100 million

    Large

    $100 million to less than $250 million

    Very large

    $250 million or more

    Total business income is the amount:

    • an individual showed under item P8 Business income and expenses at the total business income label of the 2015 individual tax return
    • a company showed in the information statement under the income item at the total income label S of the 2015 company tax return
    • a fund or self-managed super fund showed at item 10 under the income item at the total assessable income label V of the applicable 2015 fund annual return
    • a partnership or trust showed at item 5 under the income item at the total business income label of the 2015 partnership or trust tax return.

    Calculating net tax

    Throughout these taxation statistics, 'net tax' is essentially the amount of tax owed for the income year, before refundable credits are taken into consideration. It does not generally equate to the amount of tax payable or refundable as shown on a notice of assessment.

    Items in brackets below refer to tax return labels.

    A taxable entity is one where net tax is more than $0, whereas non-taxable entities are those with net tax less than or equal to $0.

    Individual net tax

    Individual net tax is calculated as:

     

    Total income or loss

    less

    Total deductions

    less

    Tax losses of earlier income years

    gives

    Taxable income or loss

    apply

    Individual marginal tax rates

    add

    Extra income tax

    gives

    Gross tax

    subtract

    Total non-refundable tax offsets

    add

    Medicare levy

    add

    Medicare levy surcharge

    add

    Temporary budget repair levy

    gives

    Net tax

    Note
    Extra income tax: an example of this is the amount added to tax on taxable income when a primary producer’s average income exceeds taxable income in a particular year.
    Company net tax

    Company net tax is calculated as:

     

    Total income (item 6S)

    less

    Total expenses (item 6Q)

    gives

    Total profit or loss (item 6T)

    add or subtract

    Reconciliation items (item 7)

    gives

    Taxable income (calculation statement – item A)

    apply

    Relevant company tax rate

    add

    R&D recoupment tax (calculation statement – item M)

    gives

    Gross tax (calculation statement – item B)

    subtract

    Non-refundable tax offsets and Franking deficit tax offset

     

    (calculation statement – items C, D and F)

    gives

    Net tax

    Super fund net tax

    Super fund net tax (for APRA and SMSFs respectively) is calculated as:

     

    Total assessable income (item 10V/11V)

    less

    Total deductions (item 11N/12N)

    gives

    Taxable income or loss (item 11O/12O)

    apply

    Fund type specific tax rate

    add

    Tax on no-TFN quoted contributions (item 12J/13J)

    gives

    Gross tax (item 12B/13B)

    subtract

    Non-refundable non-carry forward tax offsets (item 12C/13C)

    gives

    Net tax

    Estimating tax on net capital gains

    For taxation statistics purposes, the tax on net capital gains is an estimate of the tax required to be paid, based on using an average tax rate approach.

    Tax on net capital gains is estimated as:

     

    Net tax

    divided by

    Taxable income

    gives

    Average tax rate

    multiplied by

    Net capital gain

    gives

    Estimated tax on net capital gains

    Estimating business net tax

    For taxation statistics purposes, business net tax is an estimate of the amount of net tax attributable to net business income. Business net tax is only calculated for taxable individuals with net business income and taxable income.

    Business net tax is estimated as:

     

    Net income or loss from business (sum of items 15B and 15C)

    divided by

    Taxable income (label $ under the Losses section)

    gives

    Proportion of taxable income sourced from net business income

    multiplied by

    Net tax

    gives

    Estimated business net tax

    Note
    Where the proportion calculated above is greater than 1, it is changed to 1.

    Calculating net GST

    Net GST is calculated as:

     

    Gross GST payable

    add

    Deferred GST payments on imports

    less

    Input tax credits

    gives

    Net GST

    Note
    The net amount of GST on the activity statement can also be affected by increasing and decreasing adjustments.
      Last modified: 08 Aug 2019QC 51717