Reporting business income and tax
If you operate a business, you will need to pay income tax on money your business earns. You must lodge a tax return to report your taxable income or loss. The type of tax return form you use depends on your business structure.
If you're registered for other taxes, such as goods and services tax (GST), fuel tax credits or pay as you go (PAYG) withholding, you report these to us on a business activity statement (BAS).
You must keep accurate and complete records of your business income and expenses.
If you need help, phone the Business enquiry line on 13 28 66, or the Indigenous helpline on 13 10 30 (8:00 am to 6:00 pm Monday to Friday, except public holidays).
Your tax return
Income tax is the tax you pay on any money your business earns. Most money you receive will be assessable for income tax purposes. Each year, you need to lodge a tax return to tell us how much money your business has made and how much tax you've paid. If you’ve made a profit, you will probably have to pay some tax. It's best to put money aside throughout the year to help pay for your tax.
Find out about the type of income tax return you need to lodge for your business structure.
Claiming business deductions
You may be able to claim business deductions for some expenses, such as buying products or services for your business, or certain capital expenses.
Generally, there are 3 rules for what we accept as valid business deductions:
- The expense must have been for your business, available as an allowable deduction and not for private use.
- If the expense is for a mix of business and private use, you can only claim the portion that is used for your business.
- You must have records to prove it.
You may also be eligible for concessions, offsets or rebates which will reduce the amount of tax you must pay.
For more information, see:
Business activity statements
Business activity statements (BAS) are different to tax returns. Businesses use an activity statement to report and pay other taxes such as GST and PAYG withholding.
If you're not registered for GST, we will send you an instalment notice (instead of a BAS) in your first or second year of business.
If you're registered for GST, we will automatically send you a BAS when it's time for you to lodge. If you use ATO online services, you will receive your BAS there. It will be available 21 days before the BAS is due, and we will also email you to let you know it’s there.
You can also choose to receive and lodge your BAS as a paper form in some circumstances. We send most businesses their BAS every 3 months. If you run a very small business, you may only have to do yours once a year.
Even if you have no amounts to report for the period, you must lodge your BAS on time. This is called a 'nil' BAS.
You must lodge your BAS on time even if you are having difficulty paying what is due. If you are finding it hard to lodge and pay on time, you should contact us before the due date. We'll then work with you to find a solution. We may be able to help you set up a payment plan. We also have information on managing payments, such as budgeting for tax and super, making pre-payments, and avoiding tax debts. There are also free programs and resources if you want to build your small business tax and super knowledge or learn how to manage cash flow.
Indigenous artists who live or work in isolated areas
Indigenous artists who work or live in an isolated area, known as Special or Ordinary Zone A geographic regions, are not required to quote an Australian business number (ABN). Find out about these isolated areas in the Australian zone list.
Tax will not be withheld from payments to these artists, even though the artist has not quoted an ABN.
An artist's work, for these purposes, is set out in LI 2026/9 Taxation Administration (Withholding Variation for Payments to Indigenous Artists who do not Quote an ABN) Legislative Instrument 2026.
In these circumstances, if you:
- are the Indigenous artist, you don't need to quote an ABN and will not have tax withheld
- run a business and pay an Indigenous artist, you will not require an ABN to be quoted and will not withhold tax.