There are several types of tax obligations that a business in Australia has to fulfil each year. The types of taxes you are required to pay will depend on the nature of your business, the size of your business, the number of employees you have, the benefits that you provide to them, the types of goods you deal in, as well as the primary location where your business is registered. In order to assess the tax liability of your business with respect to different taxes, as well as to report and pay the taxes, you will have to submit a document known as the Business Activity Statement (BAS) to the appropriate tax authorities.
What is a Business Activity Statement (BAS)?
A BAS is a report that is submitted by a business to the Australian Taxation Office. On the basis of this report, various business taxes are paid to the relevant tax office. The BAS contains details about the various types of taxes that may need to be paid by a business. These taxes are:
- Goods and services tax (GST)
- Pay as you go withholding tax
- pay as you go instalment tax
- Fringe benefit tax (FBT)
- Luxury car tax (LCT)
- Wine equalisation tax (WET)
- Fuel tax credits
Every BAS is unique to a business and may or may not include all the types of taxes as mentioned above. Your business activity statement will only include detailed report about those types of taxes that your business is eligible to pay. There are certain reporting requirements that need to be completed before you can submit a valid BAS to the tax office. Here are some of the main reporting requirements of a typical BAS:
- Reporting period: Your business activity statement should clearly mention the reporting period on it. The start date as well as the end date of the reporting period should be stated.
- Document ID: This is a number that is unique to every business as well as unique to every statement. Hence, every BAS that you submit will have a different document ID. This ID helps to identify your BAS if and when required.
- Australian Business Number: The ABN is another mandatory requirement on a business activity statement. With the help of the ABN the taxation authorities can determine which business the BAS is being submitted for.
In addition to the above, a BAS will also mention the date when the report was lodged as well as the date when the relevant tax was paid. The mode of payment, such as cash, cheque etc also has to be mentioned on the BAS. Finally, the most important requirement on a BAS is the details of the tax that is being reported and paid by the respective businesses.
At the end of the business activity statement there is a section for a summarised version of the taxes being reported. Your BAS should also clearly mention whether you have a pending tax liability or you are expecting a refund from the taxation office.
Submitting a Business Activity Statement (BAS)
Once you have completed the BAS and signed it, you need to submit it to the Australian Taxation Office before the due date for final submission. The due date is typically mentioned at the top of the BAS form. Depending on whether you are required to submit the BAS monthly or quarterly, your due date will differ accordingly. In the event that the final submission date is a holiday or a weekend, the ATO allows businesses to submit the BAS on the first working day after the holidays. In case you do not submit the BAS and pay the tax in a timely manner, your business could have to suffer penalty payments.
The completed business activity statement can be submitted to the ATO through several channels. You can submit the BAS through their online business portal, or through the electronic commerce interface (ECI). Businesses also have the option of hiring a registered BAS agent who can help them to complete and submit the BAS properly. Other options for submitting a BAS include over the phone or by regular mail. However, you can submit the BAS over the phone only if you have nothing to report on it. Also, it is mandatory to file a BAS for every tax period as specified by the ATO. Whether or not you have done any business in that period is irrelevant. Once you have received a BAS form from the ATO, you have to complete and submit it. If no business has been transacted in that particular tax period, then the BAS for that period will be referred to as a nil report.
Since it is vital for the success of any business to report and pay relevant taxes on time, it is advisable to take help from registered BAS agents in order to submit an accurate business activity statement. Alternatively, you could also hire the services of an expert tax consultant to help you in this regard.