Lesson 4 - Taxation obligations and business structure

Outcomes (What you need to know and be able to do) • Explain the importance between effective book keeping and tax obligations

• Outline the taxes in Australia • Explain how a business structure can influence its tax obligations • Calculate the amount of tax a business is obligated to pay in case studies 

From last lesson…….

Outline one benefit of a cash book

Benefits of a cash book

determine the cash balance.

keep a tight control on the cash

monitor the business’s cash flow position — that is, the money coming into the business and the money leaving the business

Commonwealth government taxes

PAYG is a system whereby tax is taken directly from an employee’s salary or wage.

Company Tax

Company tax is charged against the earnings of a company.

The tax is calculated on the profit of the company at a rate of 30 per cent.

Fringe benefits tax (FBT)

A fringe benefit is a benefit provided by an employer to an employee or their wife or husband in addition to wages, superannuation or other traditional rewards.

Capital gains tax (CGT)

Capital gains tax is a tax calculated on transactions involving profit earned from the sale of assets.

State Government Taxes

Payroll tax is charged against a business based on the payroll of that organisation.

Stamp duty is payable by individuals and businesses for transactions involving the purchase of items such as land, buildings and motor vehicles.

Stamp duty tax

Land tax is a tax on land owned by individuals or organisations.

Land Tax