TAX RETURNS

The Australian tax scheme

Towards the end of each financial year (the end of June), the Commissioner for Taxation initiates the tax return process by publishing a notice in the Commonwealth Gazette. The basic scheme of the two Income Tax Assessment Acts is as follows:

Residents are assessed on ordinary and statutory income from all sources.
Non-residents are assessed on ordinary and statutory income from Australian sources.
Income is total amounts received or accrued. Some income is exempt.
Assessable income is gross income less exempt income.
Taxable income is assessable income less allowable deductions — generally, the costs of producing that income and certain concessional deductions.
Tax payable is determined according to the table on taxable income less offsets. There are many offsets or reductions of tax (formerly known as “rebates”.
Some taxpayers (including primary producers, authors, inventors, sportspeople and performers) have the option of averaging their income over five years, and their tax liability is determined according to a further set of calculations.