What is Income Tax?

Income Tax - Business (Definition)

Income tax is a levy levied by governments on businesses and individuals that conduct their operations inside their jurisdiction's borders. Most countries have a progressive tax system, which implies that individuals or businesses with higher incomes pay a bigger proportion of their incomes in taxes than those with lower incomes. Taxable business income is generally defined as the difference between a company's business income and its operating and capital expenses; this is referred to as the company's net profit. Most businesses are required to record and pay taxes on income produced or received within a financial year. To avoid double taxation, business partners also need to report the revenue and losses of the partnership on their individual tax returns.

Checklist

End of financial year checklist

The end of the financial year is an important time of the year when businesses need to ensure they have submitted all necessary reporting requirements to the ATO. Use our end of financial year checklist to stay organised and prepared for tax time.

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