Company Tax Compliance for Accountants in 2026

Company tax compliance starts with reconciled accounts and ends with an authorised return, a confirmed lodgement outcome and working papers that explain every tax adjustment. Use this sequence to prepare and review an Australian company client’s income-tax file.

Establish the Company’s Tax File

Confirm which company you represent and which income year you are preparing before you use last year’s return as a starting point.

1. Match the legal entity, ACN and ABN across the engagement, accounts and ATO record. Confirm who can instruct you and who signs for the company.
2. Confirm your authority to act and the company’s agent nomination where required. Keep evidence of authority separately from a successful register check.
3. Establish the reporting period, including any approved substituted accounting period. Record whether the company acts in its own capacity or as trustee.
4. Review residency facts, prior-year returns, assessments and amendments. Reconcile opening tax losses, asset tax values, franking balances and related-party accounts to retained schedules.

Australian incorporation is a residency test. For a foreign-incorporated company, assess its business activities, central management and control and voting power under the applicable residency rules. Escalate treaty or cross-border questions before assuming the previous return’s residency answer still applies.

Company income-tax compliance is separate from ASIC company compliance, including annual reviews and company-register notifications. GST, payroll reporting and other tax obligations also need their own work. Define the engagement so the company knows which jobs you handle.

Before preparation begins, the file must identify the correct taxpayer and period, with authority recorded and unexplained opening differences assigned for resolution.

Collect Company Details With Tax Genie

Collect the company’s details and supporting documents before staff start deciding its tax treatments. Use the small business tax checklist for the separate year-end records request.

Tax Genie’s company form collects entity details, contacts and supporting documents in a guided request. Your client sees the questions that apply and can upload the records your practice needs. Existing clients can confirm details already held and update what has changed.

Tax Genie runs rule-based checks on identifier formats, register matches, cross-field consistency and missing documents. AI then reviews answers for common client mistakes. For example, a client who reports GST registration without a reporting frequency receives a specific correction request.

Tax Genie emails fixable issues to the client and reopens only the affected form sections on the same private link. Automatic reminders chase outstanding items. Staff can also ask the client to change specific sections, with staff corrections recording who changed what and when.

Use the corrected form as evidence for preparation. Staff decide tax treatments and calculate the return, then review and lodge it through the practice’s tax software. A corrected company contact record does not resolve a disputed deduction or prove a loan’s tax treatment.

Reconcile Accounts to Taxable Income

Reconcile the accounting result to taxable income through adjustments that another staff member can trace to supporting records.

1. Agree the final trial balance to the financial statements. Reconcile bank balances, receivables, payables and asset movements before carrying figures into the return.
2. Identify income recognised differently for accounting and tax. Document exempt or non-assessable amounts and tax-specific timing adjustments where applicable.
3. Review expenses for deductibility and timing. Add back accounting amounts that tax law does not allow, then claim supported tax deductions separately.
4. Apply eligible prior-year tax losses only after completing the company loss review. Agree the result to the return and required schedules.

The ATO company return separates accounting information from reconciliation to taxable income or loss. Keep a working paper showing each adjustment’s source, amount, tax basis and return destination.

Consider this fictional company’s reconciliation. These are income-tax calculation amounts, with recoverable GST already excluded from the relevant accounting costs.

Reconciliation item	Adjustment	Running total
Accounting profit before income tax	Starting amount	$120,000
Accounting depreciation	Add $18,000	$138,000
Penalties assumed non-deductible under the relevant tax rule	Add $2,000	$140,000
Tax decline-in-value deduction supported by the asset schedule	Subtract $24,000	$116,000
Prior-year tax loss confirmed available for deduction	Subtract $10,000	$106,000

The example assumes no other differences and that the company qualifies to deduct the stated loss. Taxable income is $106,000: $120,000 + $18,000 + $2,000 - $24,000 - $10,000. Calculate company tax separately after confirming the applicable rate and offsets.

If taxable income unexpectedly equals accounting profit, check whether the tax depreciation adjustment or loss schedule was omitted. If the return differs from the working paper, trace the difference to the return labels before seeking approval.

Review Company-Specific Tax Issues

Review the company’s ownership, related-party dealings and tax attributes before accepting the calculated result.

Review area	Evidence to inspect	Result to record
Shareholder and related-party balances	Opening balances, transactions, repayments and explanations of private expenditure	Which amounts need a separate technical review and who owns it
Dividends and franking	Resolutions, distribution statements, franking account movements and supporting tax payments	Supported franking calculations and distributions, with required reporting identified
Prior-year losses	Loss schedules, ownership changes and business activity changes	Basis for deducting a loss or carrying it forward
Company tax treatment	Residency, aggregated turnover, income composition and any special company category	Applicable rate classification and calculation basis

Do not assume every small company uses the lower company tax rate. Document the base rate entity tests, including aggregated turnover and passive income, against the ATO company tax rate rules. Check franking calculations separately because the corporate tax rate for imputation purposes has its own rules.

Company losses need a continuity-of-ownership or applicable business-continuity assessment. A carried-forward balance in tax software is evidence of a recorded amount, not proof that the company can deduct it this year. Keep tax losses separate from net capital losses.

For a private company’s shareholder payments or loans, refer the identified transactions to a Division 7A review. Obtain the conclusion and supporting calculation before completing the return. Leave complex loan, residency or group questions with the staff member qualified to resolve them.

Review and Obtain Client Approval

Give the preparer and reviewer separate responsibilities, then obtain approval for the version you intend to lodge.

The preparer links figures to source records and explains adjustments. The reviewer checks material judgments, company-specific issues and agreement between the return and working papers. Record who reviewed each issue and how any query was resolved.

Show the company’s public officer the complete return and applicable schedules. Explain material adjustments, taxable income, estimated tax payable and the treatment of disputed or unusual items. Confirm the public officer’s authority and use the declaration required for the lodgement method.

Under the declaration rules, the client must give the agent a signed written declaration before the agent lodges. It confirms the information supplied is true and correct and authorises lodgement.

Resolve missing material records or contradictory answers before requesting that declaration. If a client says a balance is repaid but the bank record shows no repayment, obtain the supporting transaction evidence. Do not treat approval as a substitute for resolving the difference.

Keep the approved return version with the declaration. If a material correction changes that version, explain the change and obtain the necessary approval before lodging.

Lodge and Retain the Compliance Record

Confirm the return’s lodgement outcome and keep a file that explains the service you provided.

1. Lodge the authorised version and retain the acknowledgement and reference. A transmission error needs correction and a confirmed outcome before the job is marked lodged.
2. Reconcile the processed assessment or account outcome to your calculation. Investigate differences in taxable income, offsets or credits before telling the client the balance is settled.
3. Tell the company who arranges payment and which payment deadline applies. Distinguish lodgement timing from payment timing and record any agreed follow-up responsibility.
4. Track later errors through the appropriate correction or amendment procedure. Keep the explanation, revised calculation, client instructions and outcome with the original file.

The TPB record-keeping obligation requires practice records for at least five years after the service is completed. Records must explain the service’s scope and outcome, information considered and advice received or given. Complex matters also need the facts, assumptions and calculation reasoning.

Keep the company’s own tax-record retention requirements separate from the practice’s service-record obligation. Some records, including those supporting carried-forward attributes, need longer retention. Record the retention basis and responsibility instead of deleting the whole file when one minimum period ends.

Close the job when the lodged version matches the approval, the outcome is confirmed and payment responsibilities are recorded. Another staff member must be able to follow each material figure from the return to its source and your decision.