Australian Income tax

Running head: AUSTRALIAN INCOME TAX 1
Australian Income tax
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Course
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AUSTRALIAN INCOME TAX 2
Australian Income tax
Introduction
Over the years, nations have been supporting themselves on the platform of imposing
an income tax on its citizens to increase its revenue. This is because the government cannot
function without funds. Thus, to ensure that there are enough funds to operate the nation’s
activities, they typically collect taxes from their citizens. According to this case study: Piper
and David Chapman on the issue of transfer of money from South Africa to an Australian
bank account there are always some implications or income tax liability seen, (Berger, L.L.,
2016). During the transfer of this funds Piper will be charged a higher tax rate because of the
sum of money been transfered. Money transactions that exceed $10,000 or alert a suspicion
are always by law reported by the banks. However, certain charges and implications from the
Australian income tax can be avoided if she employs certain procedures.
Case Illustration
The term income tax can be defined as a tax imposed on a taxpayer that varies
depending on an individual’s income or profits, (Buenker, J.D., 2018). There are implications
associated with the transfer of money from a retirement annuity to an Australian bank
account. Such as the money can be blocked and handed over to an authorized dealer, also,
may incur termination penalties for withdrawing early. For Piper to avoid or reduce any
potential Australian income tax liability on the investment there are possible strategies to
employ such as it is mentioned that Piper has private health insurance, thus, she should
contribute her investment to a Health Saving Account first before transferring it to the
Australian bank account. Also, she a volunteer at the local community centre so she should