How the Goods and Services Tax (GST) affects business income 043-03100080
Expand allThis page contains examples of how income is assessed for a business and a link to the Australian Taxation Office website for information on the ABN.
Assessing income for a business
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Assessing income for a GST registered business + Read more ... Paul operates a lawn mowing business which is GST registered. Paul has an annual gross income of $12,000 including the GST that has been charged. Over the year Paul pays $1,500 in GST to the ATO and the adjusted gross income is $10,500. This is the gross income less the GST that is paid to the ATO. Paul's allowable deductions are $1,815 (for example, petrol, blades, spark plugs, depreciation) less input tax credits of $165 received from the ATO. Paul's allowable deductions are calculated as ($1,815 - $165) = $1,650. Paul's annual assessable income is $10,500 - $1,650 = $8,850. |
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Assessing income for a business that is not GST registered + Read more ... Mark operates a lawn mowing business but has elected not to register for the GST. Mark has an annual gross income of $12,000 and does not pay any GST to the ATO. Mark's allowable deductions are $2,500. This also includes the GST component paid for goods. Mark receives no input tax credits for goods and services used in the business. Mark's annual assessable income is $12,000 - $2,500 = $9,500. |