Company tax return preparation checklist (AU)
A company return is more than a mapped trial balance — the franking account, loss rules, and related-party positions create most of the risk. This checklist covers the 12 structural areas that drive company tax outcomes.
This is a 12-step checklist for preparing an Australian company tax return. It covers the base rate entity 25% test, franking account, Division 7A, R&D tax incentive, carry-forward loss tests, thin capitalisation, and the IDS for international dealings. Use it as a workpaper quality check.
The checklist
Confirm base rate entity status
Test whether the company qualifies as a base rate entity (25% rate) — aggregated turnover under $50m and no more than 80% base rate entity passive income.
Reconcile accounting profit to taxable income
Prepare a detailed reconciliation — permanent differences (entertainment, fines) and temporary differences (accruals, prepayments, depreciation).
Depreciation and temporary full expensing transition
Confirm asset pool balances and the transition from temporary full expensing to standard depreciation. Review effective life elections.
Carry-forward losses — continuity and similar business
Apply the continuity of ownership test (more than 50%) and the similar business test where COT fails.
Franking account reconciliation
Reconcile the franking account — opening balance, PAYG instalments, refunds, franked distributions paid. Diarise the franking deficit tax risk.
Division 7A compliance
Review shareholder loans, payments, and debt forgivenesses. Document any complying loan agreements and minimum yearly repayments.
R&D tax incentive
If the company is registered for R&D, confirm eligible activities and expenditure. Apply the refundable/non-refundable offset rates.
Thin capitalisation (if applicable)
For entities with cross-border debt, apply the post-2024 earnings-based test (fixed ratio, group ratio, or third-party debt).
International Dealings Schedule
Prepare the IDS for related-party international dealings. Assess transfer pricing documentation requirements.
CGT events during the year
Identify CGT events, calculate gains/losses, and apply small business CGT concessions or rollovers where available.
Consolidated group positions
For tax consolidated groups, run the entry/exit calculations, reset cost base schedules, and allocate the tax liability.
Lodge and manage PAYG instalments
Lodge the return by the due date, pay any balance, and update PAYG instalment assumptions for the new year.
When this checklist applies
Use this checklist during year-end preparation for any Australian company return — private, public, or consolidated group head company.
Common pitfalls
- Misapplying the base rate entity test when passive income exceeds 80%
- Breach of Division 7A minimum yearly repayments triggering a deemed dividend
- Loss utilisation without running the continuity or similar business test
- Franking account deficit at year end
- Missing the R&D tax incentive registration deadline (10 months after year end)
Run this checklist on a real matter
Quillio extracts reconciliation items from financial statements, runs the base rate entity and loss tests, and flags Division 7A exposure for action. See /practice-areas/tax-lawyers or start a free trial.
Company tax law is complex and tax rates and thresholds change. Use this checklist as a structural guide and confirm current rules for the relevant income year.
Use this checklist on your matter.
Quillio can run this checklist on a specific NSW conveyancing matter — confirm each item, calculate adjustments, and generate the supporting documents. The free trial requires no credit card.
Start your free trial