A Joint Venture is an agreement between two or more individuals or businesses that have combined their resources in order to achieve a common strategic goal. They are usually formed for a limited period of time to attain a common business goal and once that specific purpose is accomplished, they dissolve. The parties may or may not be involved in other businesses of their own. Since two or more parties are involved, the expertise, contacts, knowledge, intellectual property, systems of individuals and/or entities can be used to run the venture efficiently and increase the profitability of the business.

Joint venture agreements can be formal wherein a new entity is established to conduct the business or even a handshake is sufficient if the agreement is informal, however though this is not recommended. The parties involved, share the profits and losses as per the agreements of the contract. A written agreement is ideal as it governs the relationship of the parties involved.

The tax applied to a joint venture maybe different to other business structures, this type of business structure may have some benefits for example a partnership may require each individual/individual entity to pay taxes based on the profits received by a joint venture structure.  A JV agreement in the form of a partnership would allow each party the ability to claim a tax deduction for eligible business expenses as they are jointly receiving the income.

Joint ventures are also required to lodge business activity statements (BAS’s) if:

  • They sell goods.
  • The provide services.
  • They do not share sale proceeds and profits and instead retain them!
  • The participants are required to be registered and have accounted for GST.
  • If they are undertaking an enterprise.

The tax treatment of a joint venture is different to that of a partnership and a company. Over the years we have worked with various clients with different business structures in place, we will surely be able to guide and advice you about this distinction at our one-on-one meeting.

At this accounting and tax practice we are able to provide and setup joint venture agreements if this is your favoured choice off the available options. We can also help lodge Joint Venture tax returns as and when they fall due.

If you may have any questions and would like to have a no-obligation discussion kindly feel free to call us on 03-86091889 or you can also visit our office at or you can visit our office at Level 7, Suite 704, 343 Little Collins Street, Melbourne Victoria 3000.

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