Find information to support your lodgment, administration and record keeping requirements.
Report of entity tax information
Under the income tax transparency reporting requirements, the Commissioner of Taxation will publish a report of entity tax information about:
- Australian public and foreign owned corporate tax entities with total income of $100 million or more, and
- Australian resident private companies with total income of $200 million or more.
The information will be extracted from tax returns and amendments by the relevant entity that have been processed by 1 September in the year following the one being reported and the report will be published around December. For example, information from 2021–22 will be extracted on 1 September 2023 and published around December 2023.
The information you include at items 1, 2 and 3, along with certain income labels, will be used to identify entities for inclusion in the Report of entity tax information.
Information matching
We use information-matching technology to verify the correctness of tax returns to ensure that all information is fully and correctly declared on the company tax return.
If possible, the company tax return should fully itemise all investment income, rather than including the income in gross business income or profit and loss statements. Failure to do so could result in the company receiving an income discrepancy query letter from us.
Ensure that the company has not quoted an individual’s TFN to a financial institution for any income it intends to declare in a company tax return, or vice versa.
In particular, we will check the following in the 2023 tax returns:
- distributions from partnerships and trusts, including unit trusts
- income and credits for withholding if an ABN has not been quoted against information provided to us by payers
- total salary and wages paid against the PAYG withholding system
- the amount of prior year losses claimed which will be reconciled with the amounts of losses carried forward on tax returns of earlier years
- dividend and interest income.
Record keeping requirements
If you carry on a business, you must keep records that record and explain all transactions and other acts you engage in that are relevant for any taxation purpose.
This includes:
- Record keeping and retention
- Recording the choice of superannuation fund
- Keeping records for capital gains tax
- Keeping records for uniform capital allowances and depreciation claims
- Keeping records of tax losses
- Keeping records for overseas transactions and interests
Record keeping and retention
Subsection 262A(2) of the ITAA 1936 prescribes the records to be kept as including:
- any documents that are relevant for the purpose of ascertaining the person’s income or expenditure
- documents containing particulars of any election, choice, estimate, determination or calculation made by the person for taxation purposes and, in the case of an estimate, determination or calculation, particulars showing the basis on which, and the method by which, the estimate, determination or calculation was made.
You must keep these records for your financial arrangements covered by the Taxation of Financial Arrangements (TOFA) rules even if you are not carrying on a business in relation to those arrangements.
Generally, a company must keep all relevant records for 5 years after those records were prepared or obtained, or 5 years after the completion of the transactions or acts to which those records relate, whichever is the later, although this period may be extended in certain circumstances. Keep business records in writing and in English; however, you can keep them in an electronic form or on microfiche as long as the records are in a form that we can access and understand to determine your taxation liability.
For more about general record keeping principles and keeping electronic records, see:
- TR 96/7 Income tax: record keeping – section 262A – general principles
- TR 2018/2 Income tax: record keeping and access – electronic records.
The company is not expected to duplicate records. If the records that the company keeps contain the information specified in these instructions, you do not need to prepare additional records.
For some items on the tax return, these instructions refer to specific record-keeping requirements. In general, the records specified relate to instances where the required information may not be available in the normal company accounts. The record-keeping requirements in the instructions indicate the information that the company uses to calculate the correct amounts to declare on the tax return but they are not an exhaustive list of the records that a company maintains.
Prepare and keep the following documents:
- a statement of financial position
- a detailed operating statement
- livestock and produce accounts for primary producers
- notices and elections
- documents containing particulars of any estimate, determination or calculation made for the purpose of preparing the tax return, together with details of the basis and method used in arriving at the amounts on the tax return
- a statement describing and listing the accounting systems and records, for example, chart of accounts that are kept manually and electronically.
If an audit or review is conducted, we may request, and a company is expected to make readily available:
- a list and description of the main financial products (for example, bank overdrafts, bills, futures and swaps) that were used by the company to finance or manage its business activities during the income year
- for companies that have entered into transactions with associated entities overseas
- an organisational chart of the company group structure
- all documents, including worksheets, that explain the nature and terms of the transactions entered into.
The company will be liable to pay interest, in addition to the shortfall amount, if it does not declare the correct amount of taxable income or tax payable. Penalties and increased penalties for significant global entities may also apply. The company is also liable to penalties if it does not keep records, or keeps inadequate records, about business transactions or the items disclosed on the tax return.
For guidelines on record-keeping obligations and remission of penalty for failure to keep or retain records, see PS LA 2005/2 Penalty for failure to keep or retain records.
Consolidated or MEC groups
Generally, the head company of a consolidated or MEC group must keep records that, among other things, document:
- the choice in writing to form a consolidated group or MEC group
- the process of forming the group
- entries and exits of subsidiary members into and out of the group
- events which result in an entity being no longer eligible to be a head company or provisional head company (PHC)
- consolidation eliminations or adjustments to derive the income tax outcome for the head company of the group.
This would be in addition to those records usually retained to ascertain the income tax liability of the head company.
You will need to ensure you keep all documents containing particulars of any election, choice, estimate, determination or calculation and allocation processes, including showing the basis on and method by which the estimate, determination or calculation and allocation processes whereas made under the consolidation regime. For information about record keeping requirements for consolidated groups, see the Consolidation reference manual, sheet C9-2.
Recording the choice of superannuation fund
You must keep records to show that you have met your employer obligations about the choice of superannuation fund.
Keeping records for capital gains tax
A company must keep records of everything that affects its capital gains and capital losses for at least 5 years after the relevant CGT events.
If a company carries forward a net capital loss, the company should generally keep records of the CGT event that resulted in the loss for 5 years from the year in which the loss was made, or 4 years from the date of assessment for the income year in which the capital loss is fully applied against capital gains, whichever is the longer.
For more information, see:
- Guide to capital gains tax 2023
- TD 2007/2 Income tax: should a taxpayer who has incurred a tax loss or made a net capital loss for an income year retain records relevant to the ascertainment of that loss only for the record retention period prescribed under the income tax law?
For more information about keeping a CGT asset register, see TR 2002/10 Income tax: capital gains tax: asset register.
Keeping records for uniform capital allowances and depreciation claims
You generally need to keep records of depreciating assets for as long as you have the asset, and then another 5 years after you sell, or otherwise dispose of, the asset. Different time periods and requirements apply if:
- the depreciating asset is in a low-value pool
- the depreciating asset is subject to rollover relief.
Failure to provide records when requested in a review or audit may lead to record keeping penalties.
Keeping records of tax losses
If a company incurs tax losses, it may need to keep records longer than 5 years from the date on which the losses were incurred. Generally, tax losses incurred can be carried forward indefinitely until they are applied by recoupment or, in very limited circumstances, transferred to another group company. When applied, the loss amount is a figure that leads to the calculation of the company’s taxable income in that year. It is in the company’s interest to keep records substantiating the ascertainment of this year’s losses until the amendment period for the assessment in which these losses are applied has lapsed (up to 2 or 4 years from the date of that assessment).
The head company of a consolidated group (or provisional head company of a MEC group) must keep all documents containing particulars, including the basis and methods for determining losses transferred to the group, losses utilised and the available fractions calculated for the loss bundles transferred from joining entities (including the head company) at the date the group was brought into existence, and any losses transferred from joining entities after that date and at any other adjustment event.
For more information, see:
- TD 2007/2 Income tax: should a taxpayer who has incurred a tax loss or made a net capital loss for an income year retain records relevant to the ascertainment of that loss only for the record retention period prescribed under income tax law?
- Consolidation reference manual, C9-2.
Keeping records for overseas transactions and interests
Keep records of any overseas transactions in which the company is involved, or has an interest, during the income year.
The involvement can be direct or indirect, for example, through persons, trusts, companies or other entities. The interest can be vested or contingent, and includes a case where the company has direct or indirect control of:
- any income from sources outside Australia not disclosed elsewhere on the tax return, or
- any property, including money, situated outside Australia. If this is the case, keep a record of
- the location and nature of the property
- the name and address of any partnership, trust, business, company or other entity in which the company has an interest
- the nature of the interest.
If an overseas interest was created by exercising any power of appointment, or if the company had an ability to control or achieve control of overseas income or property, keep a record of:
- the location and nature of the property
- the name and address of any partnership, trust, business, company or other entity in which the company has an interest.
Record keeping provisions
Type of provision |
Legislative Reference |
|---|---|
General provision – records to be kept:
|
Section 262A – ITAA 1936 Section 132 – FBTAA 1986 Section 79 – SGAA 1992 Section 112 – PRRTAA 1987 (records must be retained for 7 years) Division 382, Section 396-25 & Section 396-125 – TAA 1953 Schedule 1 |
Controlled foreign companies |
Part X Division 11 – ITAA 1936 |
Imputation |
Subdivision 214-E – ITAA 1997 |
Forgiveness of commercial debts |
Section 245-265 – ITAA 1997 |
Capital gains tax |
Division 121 – ITAA 1997 |
Thin capitalisation |
Subdivision 820-L – ITAA 1997 |
Coronavirus economic response payments |
Sections 15 and 16 – CERPABA 2020 |
Grants or benefits claims |
Sections 26 and 27 – PGBAA 2000 |
Accruals system of taxation of certain non-resident trust estates |
Section 102AAZG – ITAA 1936 |
Private ruling by the Commissioner of Taxation
A private ruling is binding advice that sets out how a tax law applies to a company for a specified scheme or circumstance.
The easiest way to apply for a private ruling is to use one of the approved forms. They help you provide the information we need.
Amendment under self-assessment
You can alter your taxable income or the amount shown for tax offsets or some credits after you lodge your tax return. You can request an amendment to a tax assessment or lodge an objection disputing an assessment, generally up to 2 or 4 years following the assessment:
- 2 years for most companies that are small or medium businesses
- 4 years for all other companies.
The 2 year time limit for medium businesses applies to assessments for income years starting on or after 1 July 2021.
Your objection must state the full particulars of the issue in dispute.
For more information, see Request an amendment to a business or super tax return.
Penalties, shortfall interest charges, general interest charges
Find out about penalties and charges we may impose:
Penalties
The law may impose penalties on companies for:
- having a shortfall amount by understating a tax related liability or over-claiming a credit that is caused by
- making a statement which is false or misleading in a material particular, unless you took reasonable care in connection with the making of the statement
- taking a position that is not reasonably arguable, and the shortfall amount is more than the greater of $10,000 or 1% of the income tax payable for the income year
- making a statement which is false or misleading in a material particular that does not result in a shortfall amount, unless you took reasonable care in connection with the making of the statement
- failing to provide a tax return from which the Commissioner can determine a liability
- obtaining, but for the relevant anti-avoidance provision, a scheme benefit.
The Commissioner may remit all or a part of a penalty. If the Commissioner decides not to remit the penalty in full, he must give written notice to the company of the decision and the reasons for the decision.
Shortfall interest charges
Companies are liable for the shortfall interest charge where their income tax assessment is amended to increase their liability. Generally, the shortfall interest charge accrues on the increase in tax payable from the due date for payment of the original assessment until the day before the assessment is amended.
Shortfall interest charge is calculated at a rate 4% lower than the general interest charge.
The Commissioner may remit all or a part of the shortfall interest charge when it is fair and reasonable to do so.
General interest charges
Companies are liable for the general interest charge where they have:
- not paid tax, penalty or certain other amounts by the due date for payment
- varied their PAYG instalment rate to less than 85% of the instalment rate that would have covered the company’s actual liability for the income year, or
- used an estimate of their benchmark tax that is less than 85% of their actual benchmark tax for the income year.
The Commissioner may remit all or a part of a general interest charge.
Winding down, liquidating or being deregistered
If the company is winding down, liquidating or being deregistered, ensure it has complied with its lodgment, reporting, payment and other administrative responsibilities.
Find out more about what to do if:
You may also have Administrative responsibilities of a bankruptcy trustee.
Continue to: Instructions to complete the return