Applying for a SAP
An entity's accounting period is ordinarily the 12 month period ending on 30 June.
You can seek leave from the Commissioner to adopt an alternative annual accounting period or a SAP.
Use the Application for a substituted accounting period (NAT 5087, PDF 1.7MB)This link will download a file form to:
- apply for a SAP
- revert to a standard accounting period ending 30 June.
When you apply, you must provide:
- a reason for requesting a SAP
- supporting evidence.
For detail on what supporting evidence you need to provide and why it's important to lodge as early as possible, see Applying for a SAP.
See Law Administration Practice Statement PS LA 2007/21 Substituted Accounting Periods for guidance on circumstances that warrant granting a SAP.
We accept retrospective or out of date applications in limited circumstances. See PS LA 2007/21 for details.
Lodging your income tax return with a SAP
If you have been granted leave to adopt a SAP, you must meet different lodgment requirements. Find out your lodgment date, lodgment channels, tax agent concessions and see more about how SAPs work.
Transitioning to a SAP
When you adopt a SAP, the end date of your accounting period changes. This usually results in a transitional period of more or less than 12 months. You must lodge an income tax return for the transitional period.
We will determine and notify you of your transitional period when we approve your SAP.
To better understand your transitional period, see examples of transitional periods for scenarios including:
- first time lodgers
- existing entities
- entities exiting consolidated groups.
When you have adopted a SAP, the new accounting period will involve either late or early balancing in relation to a 30 June year end. Whether you are late or early is determined when your application is approved.
For more on how and when an entity transitions to a SAP, see PS LA 2007/21.
What tax return form to use
Prepare your tax return on the form for the year in lieu of which the accounting period has been adopted. For example, if you adopted a SAP ending 31 December 2023 you are an early balancer and your transitional period is in lieu of the following income year ending 30 June, being the year ended 30 June 2024. This means you should prepare your tax return on the 2024 tax return form.
We make every effort to release tax time stationery as early as possible. However, if the relevant form has not been produced by the date you wish to lodge, you must use the most recently available tax return form, whether lodging electronically or by paper.
If you are transitioning to a SAP, you must lodge a paper form if you are:
- not lodging the entity's first tax return
- lodging before we release next year's tax time stationery.
For more information see what tax return form to use and Example 5 - early December SAP.
Franking period
Your transitional period will affect your franking period.
For a corporate tax entity that is not a private company, the franking period depends on the length of its income year. The franking period is different for an early or late balancing corporate tax entity that has adopted a SAP.
Lodging additional information for early balancers
Tax return labels may change on the release of new stationery.
If you are an early balancer and lodged using the most recent tax return form, you may need to lodge an amendment if label changes are relevant to your circumstances.
We expect to publish draft details of tax return label changes each year in December. Where further changes are required due to law changes not currently known or anticipated, we will update the tax return label changes and provide further advice.
Tax return label changes
To help early balancers, each year we provide information on label changes we expect in the new tax time stationery to be released at the end of May. While tax returns can be lodged from 1 January, our processing for the new labels will not take place before our system is deployed in June 2024.
Company tax return 2024
In 2024, the changes relate to the Company tax return, items 7, 9, 13 and 24 and the Trust income schedule.
|
Change |
Label |
Description |
|---|---|---|
|
New (2023) |
J |
Small business skills and training boost |
|
New |
K |
Small business energy incentive (not yet law) |
|
Removed |
L |
Small business technology investment boost |
|
Removed |
P |
Offshore banking unit adjustment |
Explanation item 7
Explaining the label changes for item 7 - Reconciliation to taxable income or loss.
Early balancers:
If you incurred eligible expenditure from 7:30 pm (AEDT) on 29 March 2022 to the end of your 2023–24 income year, you may be able to claim the bonus deduction in respect of this expenditure in your 2023–24 tax return. For more information see Small business skills and training boost.
This measure is not yet law.
Early balancers:
- If you incurred eligible expenditure between 1 July 2023 and 30 June 2024, you may be able to claim the bonus deduction in respect of this expenditure in either (or both) your 2023–24 or 2024–25 tax return. This will depend on when your SAP ends.
Early balancers completing their 2023–24 tax return using the:
- 2023 form, claim the bonus deduction at item 7 Reconciliation to taxable income or loss label X Other deductible expenses.
- 2024 form, claim the bonus deduction at item 7 Reconciliation to taxable income or loss label K Small business energy incentive.
For more information see Small business energy incentive.
Early balancers:
If you incurred eligible expenditure from 7:30 pm (AEDT) on 29 March 2022 to 30 June 2023, you may be able to claim the bonus deduction in respect of this expenditure in your 2023–24 tax return. Early balancers completing their 2023–24 tax return using the:
- 2023 form, claim the bonus deduction at item 7 Reconciliation to taxable income or loss label L Small business technology investment boost.
- 2024 form, claim the bonus deduction at item 7 Reconciliation to taxable income or loss label X Other deductible expenses.
For more information see Small business technology investment boost.
The concessional tax treatment for OBUs in respect of offshore banking activities is removed, effective from the start of the OBU's 2023–24 income year. Rules that deem an OBU to have only paid one-third of its foreign income tax on its offshore banking income also no longer apply, meaning that its foreign income tax offset (FITO) is to be calculated using the ordinary rules.
The interest withholding tax exemption for OBUs is also removed for interest paid on or after 1 January 2024. For more information, see Changes to Australia's Offshore Banking Regime.
|
Label |
Description |
|---|---|
|
P |
Are you making a choice to opt out of the temporary full expensing for some or all of your eligible assets? |
|
Q |
Number of assets you are opting for |
|
R |
Value of assets you are opting out for |
|
S |
Temporary full expensing deductions |
|
T |
Number of assets you are claiming for |
|
U |
Are you using the alternative income test? |
Explanation item 9
Explaining the Temporary full expensing label changes for item 9 - Capital allowances.
Temporary full expensing has ended on 30 June 2023 and the temporary full expensing labels will be removed from the Company tax return 2024.
However, early balancers may still be able to claim deductions under temporary full expensing in their 2023–24 tax return using the:
- 2023 form, and following the associated instructions.
- 2024 form, claim the deduction at item 6 Calculation of total profit or loss label X Depreciation expenses.
You also need to complete item 8 Financial and other information:
- label X Select your aggregated turnover range, and
- label Y Aggregated turnover.
|
Label |
Description |
|---|---|
|
A |
Tax loss 2019-20 carried back to 2018-19 |
|
B |
Tax loss 2020-21 carried back to 2018-19 |
|
C |
Tax loss 2020-21 carried back to 2019-20 |
|
D |
Tax loss 2021-22 carried back to 2018-19 |
|
E |
Tax loss 2021-22 carried back to 2019-20 |
|
F |
Tax loss 2021-22 carried back to 2020-21 |
|
T |
Tax loss 2022-23 carried back to 2018-19 |
|
W |
Tax loss 2022-23 carried back to 2019-20 |
|
X |
Tax loss 2022-23 carried back to 2020-21 |
|
Y |
Tax loss 2022-23 carried back to 2021-22 |
|
G |
Tax Rate 2019-20 |
|
H |
Tax Rate 2020-21 |
|
Z |
Tax Rate 2021-22 |
|
I |
Net exempt income 2018-19 |
|
J |
Net exempt income 2019-20 |
|
K |
Net exempt income 2020-21 |
|
A |
Net exempt income 2021-22 |
|
L |
Income tax liability 2018-19 |
|
M |
Income tax liability 2019-20 |
|
N |
Income tax liability 2020-21 |
|
B |
Income tax liability 2021-22 |
|
O |
Select your aggregated turnover range for 2019-20 |
|
P |
Aggregated turnover for 2019-20 |
|
Q |
Select your aggregated turnover range for 2020-21 |
|
R |
Aggregated turnover for 2020-21 |
|
C |
Select your aggregated turnover for 2021-22 |
|
D |
Aggregated turnover for 2021-22 |
|
S |
Loss carry back tax offset |
Explanation item 13
Explaining the Loss carry back label changes for item 13 - Losses information.
The loss carry back tax offset was only available in the 2020–21, 2021–22 and 2022–23 income years. Companies including early balancers with a substituted accounting period can no longer choose to carry back losses.
|
Label |
Description |
Explanation |
|---|---|---|
|
A |
Current year refundable DGTO amount being claimed |
The amount of the refundable tax offset you can claim for an income year is 30% of the sum of ‘qualifying Australian development expenditure’ (QADE) identified in certificates issued to you from the Minister for the Arts for the income year. This amount is also to be included as part of your total in the Calculation statement at label E Refundable tax offsets. The maximum amount of the offset that you and companies that are connected or affiliated with you can collectively claim is $20 million in an income year. |
|
B |
Total amount of current year DGTO already being claimed or being claimed by related companies |
You should ensure that if you have any connected or affiliated companies that are claiming the DGTO, the sum of all the DGTO amounts being claimed by you and those companies does not exceed $20 million in an income year. |
New measures
There are several new measures that are currently before Parliament and are not yet law (as of 21 December 2023).
Small business energy incentive
This measure is not yet law.
The government has announced it will provide businesses (with an annual aggregated turnover of less than $50 million) with access to a bonus deduction equal to 20% of the cost of eligible assets and improvements to existing assets that support more efficient use of energy. The bonus deduction applies to the cost of eligible assets and improvements up to a maximum amount of $100,000, with the maximum bonus deduction being $20,000.
An entity with a substituted accounting period may claim the bonus deduction across multiple income years, provided that between 1 July 2023 and 30 June 2024, for both relevant income years:
- the eligible assets was first used or installed ready for use for any purpose and for a taxable purpose, or
- the eligible improvement costs was incurred.
Entities must claim the bonus deduction for the cost of an eligible asset in the income year in which the asset is first used or installed ready for use for a taxable purpose.
For improvements made to existing assets, entities must claim the bonus deduction in the income year in which the improvement cost is incurred.
If an entity can claim the bonus deduction across more than one income year, then the maximum amount of the bonus deduction the entity can claim in the latter income year is reduced by any amount claimed in the previous income year. This ensures that the $20,000 cap on bonus deductions applies equally to businesses with normal accounting periods and with substituted accounting periods.
Small business instant asset write-off
This measure is not yet law.
The Treasury Laws Amendment (Support for Small Business, Charities, and other Measures) Bill 2023External Link provides a temporary increase to the instant asset write-off threshold to support small business entities (with an aggregated annual turnover of less than $10 million).
Eligible small business entities can immediately deduct the full cost of eligible depreciating assets costing less than $20,000 that are first used or installed ready for use for a taxable purpose between 1 July 2023 and 30 June 2024. The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets. Small businesses can also immediately deduct an eligible amount included in the second element of a depreciating asset's cost.
To claim a deduction under the instant asset write-off, complete item 6 – label X and item 10 – label A.
The 5-year 'lock out' rule continues to be suspended until 30 June 2024. This rule prevented small businesses from re-entering the simplified depreciation regime if they opted out.
Thin capitalisation
This measure is not yet law.
The thin capitalisation amendments in the Treasury Laws AmendmentExternal Link (Making Multinationals Pay Their Fair Share – Integrity and Transparency) Bill 2023 will apply to assessments for income years commencing on or after 1 July 2023, with the exception of new integrity rules (debt deduction creation rules) which will apply in relation to assessments for income years starting on or after 1 July 2024.
Therefore, this measure will not apply for early balancers with a substituted accounting period commencing prior to 1 July 2023.
Under the new thin capitalisation rules:
- The newly classified “general class investors” will be subject to one of three new tests:
- fixed ratio test
- group ratio test
- third party debt test.
- Financial entities will continue to be subject to the existing safe harbour test and worldwide gearing test or may choose the new third party debt test.
- ADIs will continue to be subject to the previous thin capitalisation rules.
- The arm’s length debt test will be removed for all taxpayers.
These rules are supported by the new integrity rules – debt deduction creation rules, which will apply to assessments for income years starting on or after 1 July 2024. The debt deduction creation rules will not apply to ADIs.
Companies may be required to complete new questions at section D of the International dealings schedule.
Trust income schedule 2024
From 2024, if you have received one or more distributions from trusts, you must complete and attach a Trust income schedule, which details each distribution that you have received.
Companies who are early balancers with a SAP will not need to complete and attach a Trust income schedule when using the 2023 tax return form.
Reportable tax position schedule 2024
The Reportable tax position schedule 2024 updates will be published early in 2024. Prior to publishing, taxpayers should refer to the Reportable tax position schedule 2023 for lodgment.
Tax return instructions for SAPs
You should consider if any of these specific tax return instructions apply: