The Calculate Taxable Income screen enables Companies to reconcile taxable income. From this screen, users can update certain items in the calculation of taxable income not processed via transaction entries.
Navigate to Compliance from the Main toolbar
Select Period Compliance
Click on Calculate Taxable Income
The screen will present a breakdown of the taxable income calculation from transaction entries, with relevant tax labels attached.
Users will not be able to change the Start Date/End Date as it is an annual calculation only. The period will default to the Current Financial Year.
Users can add items for adjustments.
Step 1: Click on from a section.
Step 2: Select an item from the drop-down lists.
Step 3: Update the amount.
Step 4: Select once completed.
Items available to be added
Section 46FA Deductions for Flow-on Dividends - 7C
Deduction for Decline in Value of Depreciating Assets - 7F
Forestry Managed Investment Scheme Deduction - 7U
Immediate Deduction for Capital Expenditure - 7E
Deduction for Project Pool - 7H
Section 40-880 Deduction - 7Z
Landcare Operations and Deduction for Decline in Value of Water Facility, Fencing Assets and Fodder Storage Assets - 7N
Deduction for Environmental Protection Expenses - 7O
Offshore Banking Unit Adjustment - 7P
Exempt Income - 7V
TOFA Deductions from Financial Arrangements not included in item 6 - 7W
Other Deduction Expenses - 7X
Tax Losses Transferred in (from or to a Foreign Bank Branch or a PE of a Foreign Financial Entity) - 7S
Non-deductible Exempt Income Expenditure - 7U
TOFA Income from Financial Arrangements not included in item 6 - 7E
Other Assessable Income - 7B
Accounting Expenditure in item 6 Subject to R&D Tax Incentive - 7D
Early Stage Venture Capital Limited Partnership Tax Offset - N/A
Early Stage Venture Capital Limited Partnership Tax Offset Carried Forward from Previous Year - N/A
Early Stage Investor Tax Offset - N/A
Early Stage Investor Tax Offset Carried Forward from Previous Year - N/A
Non-refundable R&D Tax Offset - N/A
Non-refundable R&D Tax Offsets Carried Forward from Previous Year - N/A
R&D Tax Offset - N/A
NRAS Tax Offset - N/A
Franking Deficit Tax OFfset - F
To remove an item added, select the cross icon beside the item.
To remove all items added, select to return to the original status.
Select Reserve Account
A list of Reserve Account can be selected. Users can create new accounts from 58601 - 58689 code range as Reserve Account for selection.
Figures entered in the Reserve Section will affect the Income Available for Allocation.
Export to PDF or Excel
Export the Statement of Taxable Income by selecting Export to PDF or Export to Excel.
Carried-Forward Franking Credits
Simple Invest 360 will automatically calculate the excess franking credits based on any franking credits and the franking credits tax offset for the current financial year.
The system will convert the excess franking credits to an equivalent tax loss which is carried forward to future years along with any other prior year losses.
Once the period is closed, the carried forward tax losses can be found via View Losses.
Note: BGL does not provide tax advice. Please refer to ATO for details
Note: a company can claim a deduction for the carried-forward losses in a year it chooses.
In the next year, the company made a net profit of $1,000. Assuming the ATO - Loss Deduction Rule is passed, the company decides to claim the previous loss of $1,000 carried forward to offset the income.
Under the Calculate Taxable Income tab, the system will display the Tax Losses brought forward available for offset, where users can update the amount.
Dr. 49000 Profit/Loss Allocation
Cr. 58540 Retained Earnings
In year 1, the company made a net operating profit of $1,000 (excluding capital loss) and incurred a net capital loss of $300. No dividends are declared. Similarly, the capital loss can not be offset against ordinary income and thus needs to be carried forward.
Dr. 49000 Profit/Loss Allocation $425 [$1,000 * (1- tax rate%) - $300]
Cr. 58540 Retained Earnings $425
In the next year, the company made a net capital gain of $300, and the previous capital loss will be automatically applied, which is recorded under Prior Year Losses - Carried Forward Capital Losses.