Journal of Accounting & Economics

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
Course ID

TAXATION LAW1
Table of Contents
Part A:........................................................................................................................................2
Issues:.....................................................................................................................................2
Laws:......................................................................................................................................2
Application:............................................................................................................................2
Conclusion:............................................................................................................................5
Requirement (I):.....................................................................................................................5
Requirement (II):....................................................................................................................5
References:.................................................................................................................................6
Part B: Australia’s Residency Rules..........................................................................................7
References:...............................................................................................................................17

TAXATION LAW2
Part A:
Issues:
 Is an individual that comes to Australia with the working holiday visa amounts to an
Australian resident in accordance with the definition given in “Subsection 6 (1) ITAA
1936” or a foreign inhabitant within “sec 995-1 ITA Act 1997”?
 Is the income made by working holiday visa holder liable for tax as Australian
occupant under “sec 6-5 (2) ITAA 1997” or taxable as foreign resident under “section
6-5 (3) ITAA 1997”?
Laws:  “Section 6 (1) ITAA 1997” “Section 6-5 (2) ITAA 1997” “Section 6-5 (3) ITAA 1997” “Gregory v FC of T (1937)” “Nathan v FCT (1918)” “Moore v Griffiths (1972)” “FCT v Spotless Services (1995)”
Application:
As apparent from the case evidences established by Catherine, she cannot be held as
occupant of Australia within the definition given in “Subsection 6 (1) ITAA 1936” despite
the fact that she had lived in Australia under the twelve month working holiday visa1.
Catherine must be held as foreign occupant within the meaning established in “sec 995-1 ITA
Act 1997”. Representing the decision given in “Gregory v FC of T (1937)” despite the fact
that Catherine has stayed in Australia for a period of twelve months, her behaviour did not
1 Coleman, Cynthia, and Kerrie Sadiq. Principles of taxation law 2016.

TAXATION LAW3
demonstrate to be living in Australia2. Catherine primary objective was having a working
holiday and fund her expenses through a casual employment or through an irregular work.
Even though Catherine was living in Brisbane she did not considered any place as her home
or separate from other place where an individual might stay when they are on working
holiday. By taking into the consideration the explanation cited by ATO, most of the
individuals that visit Australia with a working holiday visa they are not held as resident of
Australia for tax purpose under the description given in “subsection 6 (1) ITAA 1936”.
The primary reason for considering Catherine as the non-resident since her visit is
consistent in accordance with her visa requirement. Catherine has no intention of living in
Australia and only intents to have a holiday and at the same time working for short duration.
Unlike most of the people3. Apart from most of the person, the behaviour of Catherine while
she lived in Australia is not constant with the purpose of residing permanently and not
constant with those residing in Australia. Catherine should not be viewed as Australian
occupant inside the classification given in “Subsection 6 (1) ITAA 1936” just because she
lives in a shared rented house with other working holiday maker or lived in other place for a
long time period4. The ATO further clarified that the first $37,000 is levied taxes based on the
rate of 15%. Being a working holiday maker, Catherine is liable to pay tax at a rate of 15%
on her first $37,000 while the remaining amount will be taxable on the basis of ordinary rates.
Beside the residency status of an individual, the sources of proceeds is held vital for
those that are non-residents. Mentioning the case facts of “Nathan v FCT (1918)”
2 Deutsch, Robert Et Al. Australian Tax Handbook 2018. Thomson Reuters Australia, 2018.
3 Woellner, R. H, Stephen Barkoczy, and Shirley Murphy. Australian taxation law 2019.
4 Kenny, Paul, Michael Blissenden, and Sylvia Villios. Australian Tax 2018.