Tax compliance means meeting all your obligations to file tax returns, make payments and maintain records as required by your country's tax laws and tax authority.
Tax compliance encompasses every obligation your business has to its tax authority. This includes registering for relevant taxes, filing returns on time, paying taxes when due, keeping records for the required period and responding to audit or information requests. Non-compliance carries serious consequences: financial penalties, interest charges, reputational damage and in extreme cases, prosecution. For most small businesses, key compliance obligations include income/corporation tax returns, GST/VAT/BAS returns, payroll tax reporting, fringe benefits tax (in Australia), superannuation contributions, stamp duty and various industry-specific levies. The complexity of tax compliance is one of the biggest challenges for small business owners who would rather focus on running their business. Each country has different rules, rates, thresholds and deadlines. SortBooks reduces the compliance burden by suggesting the right account and tax code for miscoded transactions, with every change approved by you and kept in an activity log.
SortBooks helps with the bookkeeping behind tax compliance by connecting to your Xero account and using AI to suggest the right account for transactions sitting in catch-all accounts, learning from your own past coding. Instead of fixing tax compliance by hand, you review each suggestion, approve it, and SortBooks updates Xero, GST code included. Then ask the AI CFO about your numbers, using live Xero data.
The BAS is an Australian tax form used to report GST, PAYG withholding, PAYG instalments and other tax obligations to the ATO, typically lodged quarterly.
VAT is a consumption tax charged on goods and services at each stage of production and distribution. Businesses collect VAT on sales and reclaim VAT on purchases, remitting the net amount.
GST is a broad-based consumption tax applied to most goods and services. Businesses collect GST on sales and claim credits for GST paid on purchases, remitting the net amount to the tax authority.
In bookkeeping, compliance refers to meeting all legal and regulatory requirements for financial record keeping, tax reporting and lodgement obligations set by your tax authority.
An audit trail is a chronological record of all financial transactions and changes made in your accounting system. It provides a verifiable history that supports the integrity of your financial data.
Connect Xero, check the AI's suggestions and approve the changes. SortBooks updates Xero for you.