Client often ask whether they could reduce their income tax by diverting income received from personal services through companies, partnership, or trusts. Personal services income (PSI) is income produced mainly from your personal skills or efforts as an individual. Income is classified as PSI when more than 50% of the amount you received for a contract was for your labour, skills or expertise. Before deciding whether to set up a new business structure, the first thing we need to do is work out if any of your income is classified as PSI. The PSI rules (or alienation of PSI rules) were introduced to ensure that taxpayers cannot reduce or defer income tax by diverting income received from their personal services through companies, partnerships or trusts or by claiming inappropriate deductions against this income. The impact of the PSI rules, for those affected by them, is: • the PSI is included in the assessable income of the individual taxpayer whose personal efforts or skills generated the income and • there are restrictions on the deductions that may be claimed by the individual or the entity against the PSI so that they broadly correspond to the deductions available to employees. Personal services income is income that is mainly a reward for an individual's personal efforts or skills. It does not include income that is mainly: • for supplying or selling goods (for example, from retailing, wholesaling or manufacturing), • generated by an income-producing asset (such as a bulldozer), • for granting a right to use property (for example, the copyright to a computer program), or • generated by a business structure (for example, an accountant working for a large accounting firm).Personal Service Income Full Article Link
Clients often ask whether they need to lodge a tax return if they only earn less than $18,200,
if they are sole traders but earn less income, etc. In this article, we would like to list the circumstances that you need to lodge individual tax return. Taxpayers who must lodge a tax return include: 1. Most resident individuals whose total assessable income exceeds $18,200 for the 2020 income year. However:
a. Persons who received certain Australian Government allowances will not need to lodge a tax return if they only had income from this source or if their taxable income was not more than $20,542.
b. Persons who received certain Australian Government pensions or who are entitled to an aged pension will not be required to lodge a tax return unless their rebate income is more than:
i. $32,279 if at any time during the year they were single, widowed or separated
ii. $31,279 if at any time during the year the person and their spouse had to live apart due to illness or the person or their spouse was in a nursing home
iii. $28,974 if at any time during the income year the person and their spouse lived together
c. A person who was an Australian resident for only part of the year will be required to lodge a tax return if their taxable income exceeds their adjusted tax-free threshold ($13,464 plus ($4,736/12) x number of months or part month the person was an Australian resident) 2. A person who has had tax withheld under the PAYG withholding system other than amounts withheld from:
a. franked or partially franked dividends where the amount of the dividends or distributions received and any franking credits totalled less than $18,200
b. dividend, interest and royalty payments received by foreign residents
c. Departing Australia Superannuation Payments
d. payments made to persons participating in the Seasonal Labour Mobility Program
e. certain superannuation lump sum payments made to a person with a terminal medical condition 3. A person who has a Reportable Fringe Benefits Amount (RFBA) or a Reportable Employer Superannuation Contribution (RESC) shown on their PAYG Payment Summary or Income Statement, regardless of income. 4. Every person who, during the year, was not an Australian resident for tax purposes and derived income (including capital gains) that is taxable in Australia, other than franked dividends, interest and royalty income subject to withholding payments 5. Every person carrying on a business or profession regardless of profit or loss. 6. A person who paid Pay As You Go Instalment Tax during the income year, irrespective of income. 7. A person who has made a loss (including a capital loss) during the income year or has a carried forward loss (including a capital loss), which they can claim in the current year . 8. A person who was entitled to the private health insurance rebate but did not claim the correct entitlement as a premium reduction, and their spouse (if they had one) is not claiming the rebate for them in their income tax return. 9. A person, 60 years old or older, who received an Australian superannuation lump sum that included an untaxed element or it is a superannuation lump sum death benefit paid to a non-dependant 10. A person, under 60 years old, who received an Australian superannuation lump sum that included a taxed element or an untaxed element or it is a superannuation lump sum death benefit paid to a non-dependant.
....Taxpayers who must lodge a tax return full article link
经常有客户问如果他们的年收入少于$ 18,200，是否需要报税。如果他们是个体工商户但收入较少，是否需要报税，等等。在本文中，我们要列出个人需要提交个人纳税申报表的情况。 必须提交纳税申报表的纳税人包括： 1.大多数居民个人在2020收入年度的应税收入总额超过$ 18,200。然而以下情况，则无需提交纳税申报表。 a. 领取某些澳大利亚政府津贴的人如果仅从此来源获得收入，或应税收入不超过$ 20,542。 b. 领取某些澳大利亚政府养恤金或有权领取老年养恤金的人，除非其退税收入超过： i. $ 32,279，如果在一年中的任何时候都是单身，丧偶或分居 ii. $ 31,279，如果该人及其配偶在一年中的任何时候因生病不得不分居，或该人或其配偶在疗养院中 iii. $ 28,974，如果该个人及其配偶在收入年度内的任何时间共同生活 c. 如果仅当年澳大利亚居民的一部分的应纳税所得额超过其调整后的免税门槛（$13,464 +（4,736 / 12）x该人作为澳大利亚居民的月数或半月数，则该人必须提交纳税申报表。） 2.根据现收现付预扣制度预扣税款的人，但预扣税款不是以下几种来源： a. 税收抵免或部分税收抵免的股息，其中所收到的股息或分派的金额以及税收抵免股息总计少于$ 18,200 b. 外国居民收取的股息，利息和特许权使用费 c. 离开澳大利亚的养老金提取 d. 支付给季节性劳动力流动计划参与者的款项 e. 向患有晚期疾病的人支付的某些养老金一次性付款 3.不论其收入如何，其PAYG付款摘要或损益表上都有应申报的附加福利金额（RFBA）或应申报的雇主退休金供款（RESC）的人。 4.在这一年中，不是澳大利亚的税收居民，应课税的所得收入（包括资本利得）在澳大利亚纳税，所得收入不包括税务抵免股息，利息和应预提所得税的特许权使用费收入 5.每个从事生意或专业的人，不论其盈利或损失。 6.在该收入年度内支付的随用随付预付税的人，与收入无关。 7.在收入年度发生亏损（包括资本亏损）或结转亏损（包括资本亏损）的人，他们可以在当年索赔。 8.有权获得私人健康保险返还但没有要求正确的权利作为溢价扣除的人，其配偶（如果有的话）不在其所得税申报表中要求为其退税。 9. 60岁或60岁以上的人，其澳大利亚退休金一次性付款中包括未征税的要素，或者是向非受抚养人支付的退休金一次性支付的身故赔偿。 10. 60岁以下的人领取了澳大利亚一次支付的养老金，其中包括征税的部分或未征税的部分，或者这是支付给非受抚养人的养老金总和的死亡抚恤金。......必须提交纳税申报的纳税人全文链接
Some clients want to deregister a company and often consult how to do it, we would like to share more information with you for tax treatment with ATO in this article. The article is based on ATO’s guidance of deregistering a company. Overview of deregistration A company may be deregistered either: • voluntarily, for example, after it is closed down • by the Australian Securities & Investments Commission (ASIC), for example, for outstanding annual review fees • by court order, for example, following amalgamation or as a result of winding-up.
Once a company is deregistered it ceases to exist as a legal entity and can no longer do anything in its own right. Note: To prevent administrative deregistration of your company by ASIC, keep your contact details and obligations up to date with ASIC. It is better to authorize ASIC agent to manage your company compliance issues to avoid any late payment for the renew fee and other issues.
Deregistering Company Full Article Link