• Your business must submit a Business Activity Statement (BAS) to the Australian Taxation Office. The report contains details about the various types of taxes that your business may need to pay.
  • You must submit a BAS to the ATO before the due date for final submission. There are financial penalties for not paying a BAS promptly.
  • You can submit your BAS online, by phone or by mail. Accounting software such as MYOB or Xero can assist in completing a statement more efficiently.

What Is a Business Activity Statement

A BAS is a tax reporting requirement by the ATO. The ATO issues it on a monthly or quarterly basis. It reports a business’ goods and services tax (GST), pay as you go (PAYG) instalments, PAYG withholding tax and other tax obligations.

The ATO automatically issues a BAS to every business registered for an Australian business number (ABN) and goods and services tax (GST). A BAS can be lodged online, by phone or by mail. The due date will depend on whether your business’ reporting is quarterly or monthly, although most small businesses only have to file a BAS every quarter. Generally, The ATO will send your activity statement around a fortnight before the end of your reporting period. The lodgement methods may vary depending on your business structure. Therefore, it is best to clarify this with the ATO. 

Types of Taxes to Be Paid Through a BAS

Goods and Services Tax (GST)

GST is a value-added tax of 10% on most goods and services. Some exemptions apply to certain businesses. You can use your BAS to report, record and pay the GST your business has collected and claim GST credits. Your business can claim GST credits at any time within four years from when you meet the relevant requirements. 

For GST purposes, each BAS covers a ‘tax period’ (one or three months). However, the BAS form is used for all tax payments, including fringe benefits tax and PAYG.

Pay As You Go (PAYG)

PAYG instalments require you to pay incremental amounts towards your expected end of year income tax liability. You can choose between an instalment amount or an instalment rate. The ATO works out an instalment amount based on the information you reported in your most recent tax return. An instalment rate is worked out by the business itself based on actual income as it is earned and using the ATO’s instalment rate. 

The ATO generally sends PAYG instalments in the form of an instalment notice rather than a BAS.

Fringe Benefits Tax (FBT)

Separate from income tax, fringe benefits tax (FBT) is a tax that employers pay on certain benefits they provide to their employees, including their employees’ family or other associates. These benefits include allowing employees to use their work vehicle for private purposes or paying an employee’s gym membership. If a business was required to pay FBT of $3,000 or more in a preceding financial year, it must include this in its BAS and pay quarterly.

Luxury Car Tax (LCT)

The luxury car tax (LCT) applies to all supplies and importations of luxury cars where the value (including GST) exceeds the LCT threshold. The ATO determines this threshold and is subject change to change. At the time of writing, LCT is at 33% and applies to the portion of the car’s value above the threshold, not the car’s total value.

In some circumstances, you may be able to defer paying LCT if you meet specific criteria determined by the ATO. This may include if you plan to use the car to: 

  • hold it for trading stock (not including holding it for hire or lease);
  • carry out research and development for the car’s manufacturer, or
  • export it GST-free.

Wine Equalisation Tax (WET)

The WET only applies to wine manufacturers, wholesalers and importers, and is a tax based on the value of wine. At the time of writing, the WET is at 29% of the taxable value of wine.

If you report and pay GST annually, you are not required to report WET on a monthly or quarterly BAS. However, you must report WET on your annual GST return.

Fuel Tax Credits (FTC)

Fuel tax credits provide businesses with a credit for the fuel tax (excise or customs duty) included in the fuel price they use in machinery, plant equipment and heavy vehicles for business purposes. The FTC rates vary from time to time. Therefore, it is essential to check with the ATO for the current rates at any time that a business wishes to make such a claim.  

The credit amount depends on:

  • when you acquire the fuel;
  • what fuel you use; and
  • the activity you use it in.

When to Submit a Business Activity Statement

Your business activity statement will display the due date for lodgment and payment. The frequency of reporting varies between businesses and depends on the type of tax. However, it is generally monthly, quarterly or annually. 

Monthly

You can report monthly if your business’ GST turnover is $20 million or more or if you choose to report monthly. You may also report monthly if your business’ income tax year does not end on 30 June. If your business reports GST and PAYG withholding monthly, you will receive a monthly activity statement at the end of each month.

Quarterly 

You can report every quarter if your business’ GST turnover is less than $20 million, and the ATO has not required monthly reporting. You may also report quarterly if your business does not elect to report monthly. The information that you must report every quarter on the BAS includes:

  • GST; 
  • PAYG withholding (if the annual withholding is less than $25,000);
  • PAYG instalments; and
  • FBT instalments.

At the end of each quarter, the business will receive a quarterly activity statement. The business will be required to report its quarterly PAYG instalment, deferred company or superannuation fund instalment and FBT instalment.

Annually

If you have voluntarily registered your business for GST and its GST turnover is under $75,000 ($150,000 for not-for-profit bodies), you can report annually.

Penalties for Not Complying With BAS Obligations

If you do not submit your business activity statements on time, you may be subject to a failure to lodge (FTL) penalty. The fines can be higher if you are often late in lodging your BAS. At the time of writing, for every 28 days (or part thereof) that your business is late in lodging, you can be penalised $110. However, you cannot be penalised more than $550.

Even though a business can use a tax agent, it is the responsibility of the business to meet its BAS obligations. Therefore, it is important to request an extension for the lodgement date or a payment plan from the ATO ahead of the due date. Alternatively, a business may make voluntary early payments to offset future BAS liability. 

How Can LegalVision Help Me?

If you have any questions about your BAS obligations, contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.

Frequently Asked Questions

When can my business claim GST credits?

Your business can claim GST credits on any business activity statement when it meets all requirements. Requirements include not claiming for GST credits despite entitlements to do so, within the four-year time limit.

Are there fines for paying a BAS late?

If you do not submit your business activity statements on time, you may fall subject to a failure to lodge (FTL) penalty. The fines can be higher if you rre often late in lodging your BAS. for every 28 days (or part thereof) that your business is late in lodging, you can be penalised $110.

Can I report my BAS annually?

If you have voluntarily registered your business for GST and its GST turnover is under $75,000 ($150,000 for not-for-profit bodies), you can report annually.

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