Partnership Tax
For tax purposes, a partnership is an association of people who carry on a business as partners or receive income jointly. A partnership is relatively inexpensive to set up and operate. A formal partnership agreement is recommended, but not essential.
If you operate your business as a partnership, control or management of the business is shared. Income and losses are shared among the partners. Each partner is responsible for the debts of the partnership, even if you did not directly incur or cause the debt.
Under a partnership, you’ll need to submit a tax return both for your business, and an individual return as a partner of the business. This allows you to separate your business expenses and deductions. Some deductions are not available to the partnership, but may be claimed by the partners.
You can register for goods and services tax (GST) if you carry on an enterprise.
It is compulsory to be registered for GST if your annual GST inclusive turnover is $75,000 or more.
PARTNERSHIP REQUIREMENTS
- the partnership lodges a partnership tax return, to report the partnership’s net income (assessable income less allowable expenses and deductions)
- the individual partners each lodge a tax return for individuals.
The partnership doesn’t pay income tax on the income it earns. Instead, you and each of the partners pay tax on the share of net partnership income they receive.
AS AN INDIVIDUAL PARTNER, YOU REPORT ON YOUR INDIVIDUAL TAX RETURN:
- your share of any partnership net income or loss
- any other assessable income, such as salary and wages (shown on a payment summary), dividends and rental income.
We provide services for:
- Partnership Tax Return Preparation
- Business Advice
- Business Plans
- GST & PAYG Advice
- BAS Preparation
- Superannuation Tax Advice
- Partnership Agreements
- ABN Application
- Business Name Registration
- Forecast of Business Profit and Loss
- Work Cover Registration
Click here for a copy of our checklist.