Document ID: chunk:federal_register_of_legislation:C2025C00029:front:0:p14
Version: federal_register_of_legislation:C2025C00029
Segment Type: other
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Character Range: 34981–37812

AFOF or a VCMP. See section 18A of the Income Tax Assessment Act 1936.
 (3) Work out your income tax for the *financial year as follows:

      Method statement
           Step 1. Work out your taxable income for the income year.
      To do this, see section 4‑15.
           Step 2. Work out your basic income tax liability on your taxable income using:

                (a) the income tax rate or rates that apply to you for the income year; and
                (b) any special provisions that apply to working out that liability.

      See the Income Tax Rates Act 1986 and section 4‑25.
           Step 3. Work out your tax offsets for the income year. A tax offset reduces the amount of income tax you have to pay.
      For the list of tax offsets, see section 13‑1.
           Step 4. Subtract your *tax offsets from your basic income tax liability. The result is how much income tax you owe for the *financial year.
Note 1: Division 63 explains what happens if your tax offsets exceed your basic income tax liability. How the excess is treated depends on the type of tax offset.
Note 2: Section 4‑11 of the Income Tax (Transitional Provisions) Act 1997 (which is about the temporary budget repair levy) may increase the amount of income tax worked out under this section.

Income tax worked out on another basis
 (4) For some entities, some or all of their income tax for the *financial year is worked out by reference to something other than taxable income for the income year.
See section 9‑5.

4‑15  How to work out your taxable income
 (1) Work out your taxable income for the income year like this:

      Method statement
           Step 1. Add up all your assessable income for the income year.
      To find out about your assessable income, see Division 6.
           Step 2. Add up your deductions for the income year.
      To find out what you can deduct, see Division 8.
           Step 3. Subtract your deductions from your assessable income (unless they exceed it). The result is your taxable income. (If the deductions equal or exceed the assessable income, you don't have a taxable income.)

Note: If the deductions exceed the assessable income, you may have a tax loss which you may be able to utilise in that or a later income year: see Division 36.
 (2) There are cases where taxable income is worked out in a special way:

Item  For this case ...                                                                                                                         See:
1.    A company does not maintain continuity of ownership and control during the income year and does not satisfy the business continuity test  Subdivision 165‑B
1B.   An entity is a *member of a *consolidated group at any time in the income year                                                            Part 3‑90
2.    A