The Self-Assessment Principle
From the ATO website, www.ato.gov.au:
"Australia's tax system works on self-assessment. This means that taxpayers must show all their assessable income and claim only the deductions and offsets (formerly called rebates) to which they are entitled, on their annual income tax return.
"Major changes to the way tax was assessed for individuals were introduced in Australia through the Taxation Laws (Self Assessment) Act 1992. The changes were designed to give taxpayers greater equity and fairness, increased certainty, and simplicity.
"The changes also placed a greater responsibility on the taxpayer to assess their own tax debt or refund. Previously, taxpayers lodged an income tax return containing information from which the ATO prepared an assessment of the taxpayer's taxable income and tax payable. The assessment was made by making any necessary adjustments to the taxpayer's calculation of taxable income. A notice of assessment was issued indicating the tax refund or the amount payable and due date for payment.
"Under the self-assessment system, the claims a taxpayer makes in their tax return are accepted by the ATO, usually without adjustment, and an assessment notice is issued. Even though the ATO may initially accept the tax return, the return may still be subject to further review."
