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Australia Airline Company Taxation Ruling

   

Added on  2020-02-19

13 Pages2699 Words29 Views
Running head: AUSTRALIA TAXATION LAWAustralia Taxation LawName of the University:Name of the Student:Authors Note:
Australia Airline Company Taxation Ruling_1
1AUSTRALIA TAXATION LAWTable of ContentsQuestion 1: Advising Client on the following items to be treated for tax purposes underAustralian Tax Law....................................................................................................................2Answer to i)................................................................................................................................2Answer to ii)...............................................................................................................................2Answer to iii)..............................................................................................................................3Answer to iv)..............................................................................................................................4Answer to v)...............................................................................................................................4Answer to vi)..............................................................................................................................5Answer to vii).............................................................................................................................6Answer to viii)............................................................................................................................7Answer to ix)..............................................................................................................................8Answer to x)...............................................................................................................................8Question 2: Calculating Manpreet’s net tax payable for the year 2016/17 financial year.........9Reference..................................................................................................................................12
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2AUSTRALIA TAXATION LAWQuestion 1: Advising Client on the following items to be treated for tax purposes underAustralian Tax LawAnswer to i)The relevant point that is provided by Airline Company does not come under thetaxation ruling, which directly indicates that this type of benefit cannot be considered as aincome. However, there are certain rules regarding the benefits provided by a company to itsemployees, which directly comes under fringe benefit tax. There are certain scenarios wherethe reward points could be considered under the fringe benefit tax. For instances if the rewardpoints are received by the employee in form of benefits provided by the employer then itcould be considered as taxable amount coming under fringe benefit tax. The second instanceis mainly when the reward points are provided to the employee in a particular arrangementwith its company. However, in the particular case there are no circumstances identified,which directly indicates that there will be no taxation on the reward points provided by theAirline Company. The Taxation Ruling 1999/6 is mainly states that fight reward received byemployee from employer paid expenses is not considered under assessable income. The caserelated to Foster J of the Federal Court in Payne v. FC of T (1996) 66 FCR 299; 96 ATC4407; (1996) 32 ATR 516 (Payne's case) can be identified from the Tax ruling of 1999/61.Answer to ii)The overall case mainly depicts that damage payment has been conducted by theservice receiver, which directly states that overall tax needs to be provided by servicereceiver. The damage that was conducted to the Capital Asset does not come under the1Legal Database(2017) Ato.gov.au <https://www.ato.gov.au/law/view/document?docid=TXR/TR19996/NAT/ATO/00001>
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3AUSTRALIA TAXATION LAWtaxable amount of the payment receiver. This directly indicates that the service receiver needsto pay the overall tax for the capital damage that is been conducted. However, there are somepoints that need to be considered before identifying the Asset to be taxed. That should beconsidered as a capital and needs to be utilised by the organisation thoroughly. In addition,the asset should also be depreciated under the depreciation clause and should be shown in theannual report. Thus, the compensation payment of crane is not considered under taxableincome. The Taxation Ruling TR 95/35 mainly states the treatment of compensation receiptsby companies for their assets. The ruling directly states that compensation received fordamaged capital assets are not considered under assessable income of the individual2.Answer to iii)The overall case mainly indicates that the there is relevant gift, which is provided bythe supplier to the nightclub manager. However, according to the Australian taxation law forindividuals, gifts of small kind is relevantly not considered, while big and expensive gifts aretaken into consideration for the taxable income. In addition, the big gifts that could beconverted into cash or amounts of high cash value could be considered under the taxableincome of the receiver. Therefore, in the case scenario the manager of the nightclub hasreceived the overall a package for the overseas holidays, which has relevant monetarybenefits that is been received by the manager. This only indicates that individual taxation ofthe manger will include the overall overseas packages provided by the supplier. TD 2016/14mainly depicts that overall no deductions are provided when individual provide gifts3.2Legal Database(2017) Ato.gov.au <https://www.ato.gov.au/law/view/document?DocID=TXR/TR9535/NAT/ATO/00001&PiT=99991231235958#P29>3 Morgan, John,TD 2016/14 – A General Deduction Is Allowed For Gifts To Clients Of ABusiness (Query Whether It Be Aimed At Getting Future Income)(2017) Tax Technical
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