Tax Facts - Activity Statement
Businesses use activity statements to report and pay a number of tax obligations, including GST, pay as you go (PAYG) instalments, PAYG withholding and fringe benefits tax. Non-business individuals who need to pay quarterly PAYG instalments also use activity statements.
Activity statements are personalised to each business or individual to support reporting against identified obligations.
Activity statements for businesses may be due either quarterly or monthly. Generally, businesses can lodge and pay quarterly if annual turnover is less than $20 million, and total annual PAYG withholding is $25,000 or less. Businesses that exceed one or both of those thresholds will have at least some monthly obligations. Non-business individuals are generally required to lodge and pay quarterly.
Businesses or individuals with small obligations may be able to lodge and pay annually. Some taxpayers may receive an instalment notice for GST and/or PAYG instalments, instead of an activity statement.
The Australian Taxation Office (ATO) web site provides instructions on lodging and paying activity statements. Detailed instructions are provided for each of the different tax obligations:
Tax Facts - General Value Shifting
The General Value Shifting Regime (GVSR) applies to arrangements that shift value between assets, causing discrepancies between the market values and tax values of the assets. Most value shifts happen when parties don't deal at the market value, causing one asset to decrease while the other increases.
Three scenarios are targeted under the GVSR. Exclusions apply to small values in each of the scenarios, as follows:
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Indirect value shifting (exclusion applies if total value shifts under a scheme are less than $150,000)
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Direct value shifts on interests (exclusion applies if total value shifted is equal to or less than $50,000)
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Direct value shifts by creating rights (exclusion applies if the market value of the right granted exceeds the proceeds for the grant by $50,000 or less).
Generally, the GVSR does not apply to normal commercial dealings conducted at market value, or dealings within consolidated groups. There are several other exclusions and safe harbours in the rules.
Tax Facts - PAYG Instalments
Pay as you go (PAYG) withholding is a system for withholding amounts from payments to employees and businesses. An entity will have withholding obligations if the entity:
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Has employees, including company directors and officeholders
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Has other workers such as contractors, and voluntarily agrees to withhold tax from payments to them
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Makes payments to other businesses, if they don't quote an Australian business number (ABN) to the entity
If you are an employer or run a business and withhold amounts from payments, you need to:
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Register for PAYG withholding
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Register as an employer of working holiday makers (417 or 462 visa's) if applicable.
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Withhold amounts from wages and other payments
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Lodge activity statements and pay the withheld amounts to the Australian Taxation Office (ATO)
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Provide payment summaries to employees and other payees
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Provide the ATO with an annual report once each income year has ended.