Introduction: Taxation

 

Taxes are imposed by both the state and federal governments. Taxation law is a complex area and you may require advice from a taxation adviser or the Australian Taxation Office.


NOTE

More information about all the topics covered in this chapter is available on the ATO’s website (www.ato.gov.au).


A number of taxes are imposed by the federal and state governments. This chapter aims to provide you with an understanding of the obligations imposed on taxpayers by Australia’s tax system. It will be most useful to you if you are an individual taxpayer, as it focuses on the taxation of your personal income. However, the chapter will also provide some assistance to you if you are a small business taxpayer or a not-for-profit organisation. Limited information is included about the GST and certain other business taxes, as well as some income tax provisions from a business standpoint.

The main sources of income tax law (collectively referred to in this chapter as “the Acts”) are:

Income Tax Assessment Act 1936 (Cth) (“ITAA 1936”);

Income Tax Assessment Act 1997 (Cth) (“ITAA 1997”);

Taxation Administration Act 1953 (Cth) (“TAA 1953”); and

Income Tax Rates Act 1986 (Cth) (“ITRA 1986”).

The ITAA 1997 represents a partial rewrite of the ITAA 1936. There are also a number of other pieces of related legislation and statutory regulations.

Taxation law is a complex area and, even armed with this chapter and the taxation publications mentioned below (seeTax resources”), you may find it necessary to seek advice from the Australian Taxation Office (ATO) or a taxation adviser. It must be remembered that this chapter can only provide the most general overview of Australian tax law and necessarily does not cover many of the complexities and contradictions in the law.


NOTE

Tax law is subject to frequent change. Therefore, while the information contained in this chapter is correct for the 2016–2017 income year, unless otherwise noted, the information may not be correct if you apply it to other income years whether past or future.


Tax resources

The chapter focuses on managing the administrative aspects of your tax obligations, rather than what it takes to calculate your tax liability. You can obtain general information concerning the income tax system from ATO publications, including further information on how to calculate your tax liability. The ATO oversees most of Australia’s federal tax system and is headed by the Commissioner of Taxation (“Tax Commissioner”).

The Individual Tax Return Instructions 2016 and the Individual Tax Return Instructions Supplement 2016 are available on the ATO’s website (www.ato.gov.au/Individuals/Tax-return/2016). These instructions replace the former TaxPack (which is no longer published).

The ATO encourages individuals to lodge their income tax returns online using the myTax service, which is a streamlined tax return specifically for individuals with simple taxation affairs. myTax is available on computers, tablets and smart phones. More information may be found at the ATO’s website (www.ato.gov.au/lodgeonline).

In addition, there is the ATO app. You can use the app to access the ATO’s online services, including myTax, to lodge and track the progress of your tax return. You can also use the app’s myDeductions tool to record and manage work-related expenses, gifts and donations, interest, dividends and other deductions.

The ATO publishes a range of materials about Australia’s tax system. These publications are available from the ATO website (www.ato.gov.au) and the ATO legal database (www.law.ato.gov.au).

There is also a range of private sector publications, including the Master Tax Guides, published annually by CCH Australia, and the Australian Tax Handbook, published by Thomson Reuters.