Question

How will you ensure that sufficient and current records are maintained to comply with lodgement requirements? How will a business determine the correct lodgement requirements for its particular circumstances? Why is it necessary to establish an accounting system to manage the taxation lodgement process?

Answer 1

Lodgment process requires the business to maintain the tax records to explain the transaction undertaken by them. Documents can be maintianed on the paper mode or the electronic mode. As a general rule the tax records should be maintained for 5 years after the later of : a) the date on which the records were prepared or the completion of the act or transcation to which the record relate.

There is no legislative requirement to prepare kept the signed copy of incomt tax return, provided the tax payer retains the copy of record use to prepare these documents for five years. If the period is extended by the tax commisioner then the records to be kept to such period as may be directed by the commmisioner. Income tax law requires that the records can be kept in the english language. The above record can be kept electonically as a scanned document provided that the electronic copy is true and clear of reproduciton of the original and is in the format that ATO can assess and undestood to ascertain the liability.

Maintianing Accounting for taxation purpose :

Accounting system forthe taxation should be accessed and correctly interpreted. Adequate record to support the accounting sysyem are eastablished and maintained. Specific taxation requirement for the business documents are compiled with. Lodgment Schedule requirement are compiled with.

Necesary To Establish the accounting System.

For the purpose of effective tax governence and tax law obligation the proper and adequate accounting system should be maintianed in the business. Effective tax governence will helps your business comply with tax administration obligations.It would lead to attract the interest and penelties if you are operatingt the business without the tax obligation which can be acheived only through the proper accounting system follows in day to day basis. Your business should be able to capture all the tax administration obligations. A proper accounting system will be followed in the business for proper and effective complaince of tax lodgment.