Company Tax Return 2025-26: What to Review Before You Lodge

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Before you lodge your company tax return, there are a few questions worth sitting with.

Has every legitimate deduction actually been identified? Have your company loans, assets, stock, superannuation, bad debts and outstanding liabilities been treated correctly? And could the structure you’re running today be costing you more tax than it needs to?

Once a company tax return has been lodged, correcting a missed opportunity gets more complicated and sometimes it isn’t possible at all. That’s why we’d rather review the complete financial position of a company before it presses submit, not after.

Here’s what’s worth going through.

Has income landed in the right year?

Your accounting records should be reviewed to confirm income has been recorded in the correct financial year. That means looking properly at outstanding invoices, deposits, deferred income, work in progress and income received in advance the items that sit near the 30 June line and can fall either side of it depending on how they’re treated.

Does everything reconcile?

Your bookkeeping system, bank accounts, payment platforms, merchant facilities and financial statements should all agree with each other. Where they don’t, the difference is usually telling you something and it’s better to find it now than to have the ATO find it later.

If reconciliation is the part that quietly slips through the year, that’s exactly the gap our bookkeeping services are built to close.

Business expenses and deductions

Not every payment made by a company is automatically tax deductible.

Each expense needs to be assessed on whether it’s immediately deductible, needs to be depreciated over time, relates partly to private use, or should be treated as capital expenditure altogether. The areas worth reviewing:

Professional fees
Insurance
Rent and occupancy expenses
Advertising and marketing
Software and subscriptions
Travel and motor vehicle expenses
Repairs and maintenance
Interest and finance costs
Home office expenses
Training and professional development
Employee and contractor costs

Assets and depreciation

The company asset register should be checked for anything purchased, sold, disposed of, damaged, replaced or simply no longer in use. Registers drift assets get scrapped without ever being written off, and replacements get added without the old item coming out.

Eligible small businesses with aggregated annual turnover under $10 million may be able to claim the $20,000 instant asset write-off for qualifying assets first used or installed ready for use during the 2025–26 financial year. The threshold applies per asset, not per business.

Assets costing more than the applicable threshold may still qualify for depreciation deductions, but the timing and the calculation both need to be right.

Trading stock and work in progress

Businesses holding stock should confirm the value of stock on hand as at 30 June. Obsolete, damaged, expired or unsaleable stock may require a different valuation treatment and that treatment can materially change the result.

Work in progress may also need to be recognised, depending on the nature of the business and how income is derived.

Bad debts

Outstanding invoices deserve a careful look, because a debt can’t generally be treated as a bad debt simply because it’s overdue. The company needs evidence that the debt is genuinely unrecoverable, and that it was written off correctly before year end.

That’s a different conversation to the one about stopping debts going bad in the first place which we’ve written about separately in managing debtors and protecting cash flow.

Company and director loans

Money taken from a company by a director, shareholder or related party isn’t simply drawings.

Division 7A can cause certain payments, loans and forgiven debts to be treated as taxable dividends in the hands of the person who received them. Loan balances, repayments, interest, minimum yearly repayments and the loan agreements themselves all need to be reviewed before the return is lodged because after lodgement, the options narrow considerably.

Dividends and franking credits

Any dividends paid or declared during the year should be checked against the company’s franking account. Incorrectly documented dividends, or over-franking, create unexpected tax liabilities and compliance problems that are far easier to prevent than to unwind.

Employee wages, superannuation and entitlements

Payroll records should reconcile with Single Touch Payroll reporting, superannuation payments and the company’s financial accounts. Worth reviewing:

Whether superannuation was calculated at the correct rate
Whether contributions reached employees’ funds by the required dates
Bonuses and commissions
Leave entitlements
Salary sacrifice arrangements
Payroll tax obligations
Payments made to directors
Contractors who may be considered employees for superannuation purposes

Payday super commenced on 1 July 2026, so this is also the moment to confirm your payroll systems are set up for the new timing super now has to reach the fund shortly after each pay run rather than quarterly.

Motor vehicles and private use

Company-owned vehicles, and vehicles used partly for private purposes, need careful treatment. Logbooks, business-use percentages, operating costs, depreciation, employee contributions and possible fringe benefits tax implications all feed into the result.

Fringe benefits tax

Vehicles, entertainment, parking, expense payments, employee loans, accommodation and other benefits provided to employees or directors may carry FBT implications. However those benefits are treated, the treatment has to align with the company’s income tax return and its financial accounts inconsistency between the two is the thing that draws attention.

Not sure where your company sits on any of this?

A pre-lodgement review is a short conversation with a senior accountant who looks at the whole position, not just the return. You’ll speak with a senior, Australian-based member of our team directly no hand-offs, no juniors, no offshore desk.

Book a company tax review → Or call 1300 063 236,

Your accountant keeps you compliant. We help you perform.

Tax losses

Companies carrying forward tax losses need to confirm they remain eligible to use them. Changes in ownership, control or business activities can all affect whether previous losses are still available to reduce current or future taxable income and the test is applied when you use the loss, not when you made it.

Capital gains and asset sales

The sale of property, shares, investments, equipment, intellectual property or other company assets may create a capital gain, a capital loss or a balancing adjustment. The accounting profit or loss recorded in your financial statements is not always the same as the amount used for tax purposes, and assuming otherwise is a common way to arrive at the wrong number.

Research and development

Companies undertaking activities involving experimentation, innovation or technical problem solving may wish to consider whether they could potentially qualify for the Research and Development Tax Incentive, subject to the legislative eligibility requirements. It’s one of the most commonly overlooked concessions in the system, particularly among businesses that don’t think of themselves as doing research.

Eligibility needs to be assessed carefully, with technical records and expenditure evidence prepared before an application is made not reconstructed afterwards.

Which company tax rate applies?

Don’t assume every small or medium-sized company automatically qualifies for the 25% company tax rate. The applicable rate may be 25% or 30% depending on the company’s aggregated turnover and the composition of its income and passive income in particular can change the answer.

GST and BAS reconciliations

GST reported through your business activity statements should reconcile with the annual financial accounts. Incorrect GST coding, private expenses, asset purchases, overseas transactions, imports and unreported sales all create discrepancies, and a mismatch between the BAS position and the annual accounts is one of the more visible flags a company can leave.

Trusts and related entities

Where the company operates alongside a trust, a partnership or another related company, the transactions between those entities need reviewing management fees, loans, distributions, unpaid present entitlements, shared expenses, asset ownership and related-party payments.

This is a specialty of ours. Family business and trust structures are a core part of the work we do, and the interactions between entities are where value is most often either found or lost.

International transactions

Companies dealing with overseas suppliers, customers, employees, contractors or related entities may need to consider withholding tax, foreign income, foreign tax credits, transfer pricing, residency and international reporting obligations.

Tax payment and cash flow

Lodging the return is only part of the job. The company also needs to know how much tax is likely to be payable, when it’s due, and what that payment does to cash flow over the following months.

A tax liability should never come as a surprise after the return has already gone in. If instalments enter the picture for the first time, that’s a second timing question worth understanding early we’ve explained how that works in PAYG instalments explained.

Forecasting that properly is exactly the kind of work our fractional CFO services exist for.

Your structure for the year ahead

Tax time is also the natural moment to ask whether the company’s current structure still fits. That review might cover:

How directors and owners are remunerated
Asset protection
Business succession
Trust and company structures
Retained profits and dividends
Superannuation strategies
Financing arrangements
Future investments
Expected growth
Tax instalments for the new financial year

Your company tax return should be the result of considered planning, accurate reporting and a clear understanding of where the business actually stands. It shouldn’t just be a form completed as quickly as possible.

Compliance looks backward. Advisory looks forward. The difference is when you pick up the phone.

Common questions

When is the company tax return due? It depends on your lodgement history and whether you lodge through a registered tax agent. Agent-lodged returns generally attract a later due date than self-lodged ones. If you’re unsure which applies to your company, ask before you assume.

Can I amend a company tax return after lodging it? Amendments are possible within set time limits, but not every missed opportunity can be recovered by amending. Some elections and treatments have to be made in the original return, which is the reason a pre-lodgement review is worth more than a post-lodgement one.

Do I need an accountant to lodge a company tax return? No, but a company return involves judgement calls on deductions, depreciation, loans, franking and losses that a form won’t prompt you to make. The value isn’t in the lodgement. It’s in the decisions made before it.

What’s the difference between accounting profit and taxable income? Accounting profit is what your financial statements show. Taxable income is that figure adjusted for the differences between accounting standards and tax law, non-deductible expenses, different depreciation treatment, timing differences and capital items. They’re rarely the same number.

What happens if Division 7A hasn’t been dealt with? Payments, loans or forgiven debts to shareholders and associates can be treated as unfranked deemed dividends and taxed in the recipient’s hands. There are ways to manage it, including complying loan agreements and minimum yearly repayments, but most of them need to be in place before the return is lodged.

Before you lodge, talk to us

Before lodging your 2025–26 company tax return, speak with Evergreen Accounting.

We’ll review your records, identify the areas that need attention, and make sure the company is making informed decisions rather than simply meeting a deadline. You’ll deal with a senior, Australian-based member of our team directly the same person who understands your business and can tell you what the numbers mean for the year ahead, not just the year behind.

Book a company tax review →

📞 1300 063 236 · Monday to Friday, 8:30am – 5pm AEST