Federal income tax is levied on the taxable income of a person or a business. It is calculated on assessable income less any allowable deductions.
- Assessable income is generally income your business earns - it does not include GST payable on sales you make, or GST credits.
- Allowable deductions are deductions for certain expenses that you necessarily incur in relation to your business.
You must lodge an income tax return for any year in which you carry on a business, even if you expect to have no tax liability.
