Glossary
Plain-English definitions for the AU tax jargon you'll hit across these guides. Statute references where they help. No consultant-speak.
- PSI
- Personal Services Income — income mainly earned from an individual's skills or effort. PSI rules can attribute the income back to the individual even if a company or trust earned it.
- ITAA 1997 Pt 2-42Related guide →
- Results test
- First of the four PSI tests. You self-assess as a personal services business if you are paid for a result, supply your own tools, and are liable to fix defects at your own cost.
- ITAA 1997 s 87-18
- TPAR
- Taxable Payments Annual Report — annual report of payments to contractors in building/construction, cleaning, courier, road freight, IT, and security industries. Due 28 August each year.
- Related guide →
- ARCtick
- Australian Refrigeration Council licence required to handle fluorocarbon refrigerants. Required for refrigeration mechanics and most air-con work.
- Division 7A
- Rules that treat loans, payments, and forgiven debts from a private company to a shareholder (or associate) as unfranked dividends unless they sit under a complying loan agreement.
- ITAA 1936 Div 7ARelated guide →
- Base rate entity
- A company eligible for the 25% company tax rate. Must have aggregated turnover under $50m and no more than 80% base rate entity passive income.
- ITAA 1997 s 23AARelated guide →
- s 290-150 notice
- Notice of intent to claim a personal super contribution deduction. Must be lodged with your fund (and acknowledged) before you lodge your tax return or roll out of the fund.
- ITAA 1997 s 290-150Related guide →
- ECPI
- Exempt Current Pension Income — income an SMSF earns supporting retirement-phase pensions, exempt from the 15% super fund tax.
- ITAA 1997 s 295-385
- TBAR
- Transfer Balance Account Report — SMSFs report transfer balance account events (pension commencements, commutations) to the ATO, now quarterly.
- In-house asset rule
- SMSF rule capping investments in related-party assets to 5% of fund value. Breaches trigger written rectification plans and possible loss of complying status.
- SISA 1993 Pt 8
- Sole purpose test
- SMSF must be maintained solely to provide retirement benefits. Personal use of fund assets pre-retirement breaches it.
- SISA 1993 s 62
- Aggregated turnover
- Annual turnover of a business plus turnover of any connected entities and affiliates. Used to test eligibility for small business concessions.
- ITAA 1997 s 328-115
- Connected entity
- An entity you control (or that controls you), with control generally meaning a 40% interest in income, capital, or voting rights.
- ITAA 1997 s 328-125
- Affiliate
- An individual or company that acts in concert with you or in accordance with your wishes in their business. Distinct from a connected entity.
- ITAA 1997 s 328-130
- CGT event
- The trigger that causes a capital gain or loss — most commonly a disposal (event A1). Each CGT event has its own timing and calculation rules.
- ITAA 1997 Div 104Related guide →
- Cost base
- What an asset is treated as having cost you for CGT — the purchase price plus incidental costs of acquisition and disposal, holding costs (if not deducted elsewhere), and capital improvements.
- ITAA 1997 Div 110
- Active asset
- An asset used (or held ready for use) in carrying on a business. Required for the small business CGT concessions in Div 152.
- ITAA 1997 s 152-40Related guide →
- Concessional contribution
- Super contribution taxed at 15% in the fund — employer SG, salary sacrifice, and personal deductible contributions. Capped at $30,000 for 2025-26 ($32,500 from 2026-27).
- Related guide →
- Non-concessional contribution
- Super contribution made from after-tax money, not taxed again in the fund. Capped at $120,000 per year (or $360,000 under the 3-year bring-forward rule).
- Related guide →
- General interest charge (GIC)
- Daily compounding interest the ATO charges on unpaid tax debts. The rate is set quarterly by reference to the 90-day bank bill rate plus 7%.
- TAA 1953 Sch 1 Pt 4-25
- Shortfall interest charge (SIC)
- Interest charged when an amended assessment increases your tax — lower than GIC, covering the period between original and amended assessment.
- Director Penalty Notice (DPN)
- Notice making a company director personally liable for the company's unpaid PAYG withholding, super, and GST debts. Two flavours: 'lockdown' (no escape if old) and standard (escape via payment, payment plan, or appointing an administrator within 21 days).
- Related guide →