Federal income tax is levied on the taxable income of a person or a business. It's 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 run a business, even if you expect to have no tax liability.