Analysing Taxes in Australia
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Added on 2020-10-05
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This letter includes relevant tax issues, taxation treatment and more moreover research on a case study of Merrill Lynch (Australia) Ltd. This letter includes relevant tax issues, taxation treatment and more moreover research on a case study of Merrill Lynch (Australia) Ltd.
Analysing Taxes in Australia
Added on 2020-10-05
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Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1Necessary documentation to meet tax compliance obligations..............................................1B. Analysing Tax Issues : .....................................................................................................5Issue:.......................................................................................................................................5Rule: ......................................................................................................................................6Applications:...........................................................................................................................7Conclusion:.............................................................................................................................8Recommendations:...........................................................................................................................9REFERENCES..............................................................................................................................11
INTRODUCTION Australian taxation is a tax compliance which implies under the demography ofAustralia. All rules, regulations, compliances and other matters related to tax are governed bystatutory body of Australian taxation office. In this project report, case scenario of VictorianFlight Academy is analysed along with their strategic business transactions and key clientmatters. Various documentation are prepared to meet the tax compliances in this report alongwith suitable taxation laws and regulations. A letter of advice is also developed and presented toVFA as a tax agent. This letter includes relevant tax issues, taxation treatment and moremoreover research on a case study of Merrill Lynch (Australia) Ltd. Vs commissioner oftaxation. The Merrill Lynch Ltd. was an American MNC continuing the business in severalcountries the head office of Merrill lynch was in new york, the company had world wide regionrelevant to this case was the “Asia pacific” or “Australian region”not only this other operationsalso in form of “business group” or “business units”. the case study belong to the its Australianbranch and of year 1994. The Merrill Lynch International Ltd. had declared to paid bonuses totheir employees at the end of year 1994 . But the bonuses were not paid until late January 1995.the case study regarding the Australian taxation.MAIN BODYNecessary documentation to meet tax compliance obligationsCase Scenario: VFA is a flying school which usually earns reasonable amount of profit but due to recentlow admission of students they has faced losses and has incurred total tax loss of 190000 dollars.In order to provide an understanding about their tax compliances, various documents areprepared which are mandatory to be developed according to Australian tax. Tax compliance and obligations :Tax compliance means meeting the tax obligations as mentioned by the law wholly and .Tax compliance refers to submitting a tax return within the specified period, correctly statingincome and deductions, pay taxes which are due date and payment of taxes. Moreover, taxcompliance refers to which a taxpayer complies with the tax rules of Australia or any othercountry from which the organisation belongs to, for example by declaring income, filing income,filling a return and paying the tax due on time. the organisation operating without required tax1
registrations (as made mandatory by Australian tax authority) or failing to file tax returns intimely manner will potentially exposed the business to interest and penalties. Moreover,regulatory and tax obligations vary according to the type of entity structure, means type ofbusiness activities performed by business (Piketty, Saez and Stantcheva, 2014).As in Australia according to Australian tax governance made mandatory to prepareproper records regarding tax compliance obligations. Records includes the following;Financial records Legal records Employee recordspolicy and procedure other business recordsFinancial records – are the sources of information and evidence used to preparewhichare useful to prepare, verify and/ or audit the financial statements. They also pertains adocumentation evidence of assets ownership for creation of liabilities and proof of monetary andnon monetary transactions Financial records pertains all information regarding cash flow(inflowor outflow of cash) and to understand the overall performance of business. Financial recordspertains data like receipts and invoices for goods and services purchased or sold, bankstatements, records regarding depreciation and assets, contractors records and show the capitalstructure of company(information includes debt-equity capital structure), tax documentsincluding activity statements and annual tax returns (Becker, Reimer and Rust, 2015). Financialstructure set rules on dealing with records from presentation of financial records/statements orauditing . Rules are different in different countries and different industries have specificfinancial record keeping requirements. Financial records may be in physical or electronicformats. There are several reasons behind systematic preparation of financial records; knowingyour financial position, Meeting tax obligations etc. For instance, the financial statement belowshowing the cash receipts and cash payments of year ending 30 June 2018. Particulars(payments)Amount (AUD$)Particulars (receipts)Amount (AUD$)Australian tax office 1015000TCA Airways contract1200000Bank charges 177400Other client fees 1380750Car expenses 217600Sale of land 10275002
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