Applying for a SAP
An entity's accounting period is ordinarily the 12-month period ending on 30 June.
You can seek leave from the Commissioner of Taxation to adopt an alternative annual accounting period (known as a 'substituted accounting period' or SAP).
Use the instructions on applying for a substituted accounting period to:
- apply for a SAP
- revert to a standard accounting period ending 30 June.
When you apply, you must provide:
- a reason for requesting a SAP
- supporting evidence.
Find out what supporting evidence you need to provide and why it's important to lodge as early as possible. For guidance on circumstances that warrant granting a SAP, see Law Administration Practice Statement PS LA 2007/21 Substituted accounting periods (SAPs).
We accept retrospective or out-of-date applications in limited circumstances. See PS LA 2007/21 for details.
Lodging your income tax return with a SAP
If you've been granted leave to adopt a SAP, you must meet different lodgment requirements.
See Substituted accounting periods to find out:
- your lodgment date
- tax agent concessions
- more about how SAPs work.
Transitioning to a SAP
When you adopt a SAP, the end date of your accounting period changes. This results in a transitional period of more or less than 12 months. You must lodge an income tax return for the transitional period.
We will determine and notify you of your transitional period when we approve your SAP.
To better understand your transitional period, see examples of transitional periods for scenarios including:
- first time lodgers
- existing entities
- entities exiting consolidated groups.
When you've adopted a SAP, the new accounting period will involve either late or early balancing in relation to a 30 June year end.
- Where a SAP ends on any date between 1 July and 30 November, the SAP is in lieu of the income year ending on the preceding 30 June – this is a 'late' balance date.
- Where a SAP ends on any date between 1 December and 31 May, the period adopted is in lieu of the income year ending on the succeeding 30 June – this is an 'early' balance date.
For more on early and late balancing, and how and when an entity transitions to a SAP, see PS LA 2007/21.
What tax return form to use
Prepare your tax return on the form for the year in lieu of which the accounting period has been adopted. For example:
- if you adopted a SAP ending 31 December 2025 you're an early balancer
- your transitional period is in lieu of the following income year ending 30 June, being the year ended 30 June 2026, and
- you should prepare your tax return on the Company tax return 2026 form.
We try to release tax time stationery as early as possible. However, if the relevant form has not been produced by the date you wish to lodge, you must use the most recently available tax return form, whether lodging electronically or by paper.
If transitioning to a SAP, you must lodge a paper form if you are:
- not lodging the entity's first tax return
- lodging before we release next year's tax time stationery.
For more information, see:
- What tax return form to use
- PS LA 2007/21 – Example 5 – early December SAP
Franking period
Your transitional period will affect your franking period.
For a corporate tax entity that is not a private company, the franking period depends on the length of its income year. The franking period is different for an early or late balancing corporate tax entity that has adopted a SAP.
Lodging additional information for early balancers
Tax return labels may change when new stationery is released.
If you're an early balancer and lodged using the most recent tax return form, you may need to lodge an amendment if label changes are relevant to your circumstances.
We expect to publish draft details of tax return label changes each year in December. Where further changes are required due to law changes not currently known or anticipated, we will update the tax return label changes and provide further advice.
What's new
Denying deductions for ATO interest charges
The Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025External Link amended the tax law to deny income tax deductions for general interest charges (GIC) and shortfall interest charges (SIC). The amendments apply in relation to assessments for income years starting on or after 1 July 2025.
This means most taxpayers can’t claim a deduction for GIC and SIC incurred on or after 1 July 2025 from their 2025–26 income tax return and onwards. GIC and SIC incurred before 1 July 2025 will continue to be deductible for the 2024–25 and earlier income years.
For taxpayers with an approved substituted accounting period (SAP), the law applies in a different way. This law change means that a taxpayer will no longer be able to claim a deduction from their next SAP starting after 1 July 2025. The SAP is itself considered an 'income year'.
For example, a taxpayer with an approved SAP from 1 January 2025 to 31 December 2025 may deduct any GIC and SIC incurred for this period in their 2025–26 tax return. They can’t deduct GIC and SIC amounts from their next SAP starting on 1 January 2026.
As GIC and SIC are no longer deductible, any GIC or SIC that is later remitted, will no longer need to be included as assessable income in the year in which the remission occurred. Remissions of GIC and SIC are assessable only if the original interest was deductible.
Any GIC or SIC incurred before 1 July 2025 that is later remitted, must be included in the assessable income in the year in which the remission occurred.
For more information, see Denying deductions for ATO interest charges.
Tax return label changes
To help early balancers, each year we provide information on label changes we expect in the new tax time stationery to be released at the end of May.
While tax returns can be lodged from 1 January, our processing for the new labels won't take place before our system is deployed in June 2026.
Company tax return 2026
For a list of all changes to the Company tax return 2026, refer to the Company tax return 2026 instructions – What's new for companies? when published.
For 2026, there are no label changes to the Company tax return.
Trust tax return 2026
For a list of all changes to the Trust tax return 2026, refer to the Trust tax return 2026 instructions – What's new for trusts? when published.
The Modernising tax administration systems (MTAS) program has added 3 new labels to the Statement of distribution. These enable pre-fill for Individual beneficiaries and have no impact on non-individual beneficiaries, such as companies. More information about MTAS changes for Trusts is available at ato.gov.au/MTAS.
In the Trust tax return 2026, the following label has been removed:
- 54G Other refundable tax offsets
The following updates apply at Item 58 Statement of distribution for each beneficiary:
- M Exploration credits distributed – removed
- H1 Other assessable Foreign Source Income from a financial investment amount – added
- U2 Franked distribution related to investments amount – added
- B1 Non-PP Managed Investment Scheme amount – added
Early balancers claiming Exploration credit tax offset, please refer to the 2025 form for lodgment.
For more information see Junior Minerals Exploration Incentive.
Fund income tax return 2026
For a list of all changes to the Fund income tax return 2026, refer to the Fund tax return 2026 instructions – What's new for funds? when published.
The Fund income tax return 2026 includes a new label:
- 19B Reportable Tax Position – Are you required to lodge a reportable tax position schedule
The following label has been removed from the 2026 return:
- 12E4 Exploration credit tax offset
Early balancers claiming Exploration credit tax offset, please refer to the 2025 form for lodgment.
For more information see Junior Minerals Exploration Incentive.
Self-managed superannuation fund annual return 2026
For a list of all changes to the Self-managed superannuation fund annual return 2026, refer to the Self-managed superannuation fund annual return 2026 instructions – What's new for SMSFs? when published.
In the Self-managed superannuation fund annual return 2026, the following label has been removed:
- 13E4 Exploration credit tax offset
Early balancers claiming Exploration credit tax offset, please refer to the 2025 form for lodgment.
For more information see Junior Minerals Exploration Incentive.
Partnership tax return 2026
For a list of all changes to the Partnership tax return 2026, refer to the Partnership tax return 2026 instructions – What's new for partnerships? when published.
In the Partnership tax return 2026, the following label has been removed:
- 54M Share of exploration credits
Early balancers claiming Exploration credit tax offset, please refer to the 2025 form for lodgment.
For more information see Junior Minerals Exploration Incentive.
Reportable tax position schedule 2026
You should consider if the Reportable tax position schedule applies.