Every company registered in Australia must lodge a company tax return each year, whether it traded, made a loss or sat dormant. The return works differently from an individual’s: the company pays tax at a flat rate, assesses itself, and has its own set of due dates. This guide covers the company tax return due date for 2026-27 lodgements, the current company tax rates and what needs to be in order before the return is prepared.
Company tax rates
| Company type | Tax rate |
|---|---|
| Base rate entity: aggregated turnover under $50 million and no more than 80% of income is passive (rent, interest, dividends, royalties, net capital gains) | 25% |
| All other companies | 30% |
Most trading companies in Melbourne’s west are base rate entities and pay 25%. A company that mainly holds investments usually fails the passive income test and pays 30%. The rate also sets the franking rate on dividends the company pays, so getting it wrong flows through to shareholders’ returns.
When the company tax return is due
| Situation (30 June balancer) | Lodgement due |
|---|---|
| Company lodges its own return | 28 February after the end of the financial year |
| Lodged through a registered tax agent (most small companies) | 15 May after the end of the financial year |
| One or more prior year returns were outstanding at 30 June | 31 October |
| Total income over $2 million in the prior year | 31 March |
| Large or medium taxpayer (prior year taxable) | 31 January, with payment due 1 December |
Companies are full self-assessment taxpayers, so the tax is due on the same day as the return for the 28 February, 31 March and 15 May dates. Small companies lodging through an agent whose current and prior year returns are non-taxable or produce a refund have until 5 June under an ATO concession, but the 15 May date is still the official due date. A company must be on an agent’s client list by 31 October to get the agent due dates.
PAYG instalments
Once a company has lodged a return showing tax payable, the ATO puts it into the pay as you go instalment system. The company then pays tax in advance each quarter (or annually for very small amounts) on its activity statement, and the instalments are credited against the final assessment. Instalments can be varied down if profit has fallen, but a variation that leaves the company more than 15% short attracts an interest charge.
What the return needs
- Financial statements for the year, reconciled to the bank, with debtors, creditors, stock and fixed assets supported
- A tax reconciliation: accounting profit adjusted for non-deductible items, depreciation differences, prepayments and the instant asset write-off
- Loans to and from directors and shareholders, reviewed for Division 7A
- Dividends paid during the year and the franking account balance
- Wages, super and contractor payments reconciled to Single Touch Payroll and the taxable payments annual report where it applies
- Losses carried forward and whether the company still passes the continuity of ownership or business continuity test to use them
- Director details, shareholder details and the registered office, which must match ASIC’s records
Common mistakes
- Treating a dormant company as not needing a return. It still must lodge, or formally advise the ATO that a return is not necessary
- Applying the 25% rate to a company that earns mostly rent or interest
- Paying personal expenses from the company and leaving them in a loan account at year end
- Forgetting the ASIC annual review fee and solvency resolution, which are separate from the tax return
- Lodging late. Failure to lodge penalties for companies are higher than for individuals and increase with the size of the entity
Frequently asked questions
Does a company get the tax-free threshold?
No. Companies pay tax on every dollar of taxable income at their flat rate. The tax-free threshold applies only to individuals.
Can a company carry a loss back?
The temporary loss carry back measure ended with the 2022-23 year. Losses are now carried forward and offset against future profits, subject to the ownership and business continuity tests.
When is the company tax actually paid?
For most small companies, any balance after PAYG instalments is due on the return’s due date: 28 February if self lodged or 15 May through an agent. The ATO issues a notice of assessment but the payment date is not tied to it.
Company tax returns in Melbourne’s west
Kennedy Tax & Business Services prepares financial statements and tax returns for companies across Footscray, Williams Landing and Melbourne’s west, along with BAS lodgement, company set-up and ASIC compliance. Contact us before 31 October to be added to our lodgement program.
This article is general information only and does not take into account your personal circumstances. Due dates are from the ATO lodgement program for 30 June balancers and can differ for individual companies. Speak to a registered tax agent before acting.
