Log in
Login
Password
Remember
Lost password
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

Department of the Treasury - Australian Government : Monthly Company Tax Instalments for Large Companies

10/21/2012 | 08:56pm US/Eastern

NO.120

Joint media release with
The Hon Wayne Swan MP
Deputy Prime Minister
Treasurer

Today the Government is announcing a three year process to reform the timing of company tax payments by large companies, better aligning them with GST payments by large businesses.

The total tax paid by companies will not change, but from 1 January 2014 companies with turnover of $1 billion or more will be required to remit their Pay As You Go (PAYG) company tax instalments monthly, not quarterly. Companies with turnover of $100 million or more will have a further one year period to prepare for this change, with monthly payments to start on 1 January 2015. Companies with turnover of $20 million or more will have over three years to prepare for the change, with monthly payments to start on 1 January 2016.

This reform will make the tax system more responsive, efficient, and consistent by better matching tax collections with the economic conditions faced by business. Affected companies will pay smaller tax instalments immediately following months when business is down, and larger instalments when business is strong. It will also align company tax instalments with GST payments to streamline companies' payment cycles.

Most companies are currently required to pay their income tax in four quarterly PAYG company tax instalments, but most large companies are generally required to pay GST in monthly payments. Wage and salary earners have tax withheld from their income as it is earned. Moving large companies to monthly income tax instalments will go a long way to addressing these inconsistencies.

The Government believes that if workers are required to pay tax as they go, then it is reasonable and logical for large companies to do the same. This change continues the reform of the company tax instalment system that began in the late 1980s and complements other initiatives the Government has announced to address timing disparities in the tax system, such as 'loss carry-back', which allows businesses to use losses more flexibly, as well as more timely access to the Research and Development Refundable Tax Offset.

This measure will affect around 350 companies from 1 January 2014, around 2,500 companies from 1 January 2015 and around 10,500 companies from 1 January 2016.

The Government will consult with affected parties to ensure that the reform can be implemented with minimal disruption for businesses.

Taxpayers don't want to over-pay their tax, or be left with an unwieldy tax debt at the end of the year. The Government knows the timing of payments is only one part of this story. Through consultation, the Government is open to additional reforms to the calculation of PAYG instalments that can complement this measure and ensure that total instalments paid throughout the year match as closely as possible to the final tax liability.

A consultation paper will be released by early next year.

22 October 2012

distributed by
React to this article
Latest news
Date Title
03:28aDJEl Nino Strengthens; Pacific Ocean Temperatures Could Top 2002, 2009 Levels
03:27a LADBROKES : Doncaster plays game of patience over sponsor
03:27a MANCHESTER UNITED : Benitez: Bale and Benzema staying
03:27a Rangers First ask Easdales to sell after closing deal
03:26a INTERTEK : proves biggest gainer in the FTSE after revenue growth successes
03:26a Government begins process of selling off Royal Bank of Scotland shares
03:26a LLOYDS BANKING : UK Lloyds Bank sell-off continues
03:26a BYOTROL : Shares Rise As It Inks Biocidal Products Deal With Solvay
03:26aDJU.K. Sells 5.4% Stake in RBS -- Update
03:25a MANCHESTER UNITED : Rafael in Pounds 2.5M switch to Lyon
Latest news
Advertisement
Hot News 
ROYAL BANK OF SCOTLAND : UK To Dispose Of About 5.2% Of RBS
ECKERT & ZIEGLER : DGAP-News: Record quarter despite restructuring expenses
FUCHS PETROLUB SE : DGAP-News: FUCHS records sales revenues of EUR 1 billion for the first time in the first six months of the year
CREDIT AGRICOLE : SA : Results second quarter and first half of 2015
MOLECULAR MEDICINE : MolMed Board of Directors approves the first half-year 2015 financial report
Most Read News
08/03 CENTER FOR INFECTIOUS DISEASE RESEARCH : Launches “Become the Cure” Bumbershoot Ticket Raffle
08/03 WIDE KATE LENS UP-DIP INTERCEPT : 34.0m @ 20.8% ZnEq
08/03 WIDE KATE LENS UP-DIP INTERCEPT : 34.0m @ 20.8% ZnEq
08/03 CHINA METALLURGICAL : MCC Group and China MCC Hold 2015 Mid-Year Working Conference
08/03 NATIONAL FARMERS' FEDERATION OF AUSTRALIA : Capturing value from science in agriculture
Most recommended articles
03:26aDJU.K. Sells 5.4% Stake in RBS -- Update
03:22aDJASIA MARKETS : Chinese Markets Rise As Beijing Clamps Down On Short Selling
03:15aDJMeggitt Gets $42.1 Million Contract to Supply Lockheed Martin Ammo Systems
03:14a China stocks rise as Beijing steps up crackdown on short-selling
03:05aDJMISC BHD : 2Q Net Profit MYR745.2 Million, up From MYR288.1 Million a Year Ago