Australian Taxable Income, Deduction, Medical Levy and Surcharge for Residents and Non-Residents

TAXATION
AUSTRALIAN TAXABLE INCOME, DEDUCTION, MEDICAL LEVY AND SURCHARGE
FOR BOTH RESIDENT AND NON-RESIDENT PERSON.
Student’s Name
Institutional Affiliation
This task entails detailed analysis of tax aspect relating to both resident and non-resident citizens
in Australia. It is more of analyzing tax issues on the scenario presented before me for;

TAXATION
2
calculation, application, scrutiny, and test on whether there exists compliance in its
administration for tax purposes within the stipulated tax year June 2018.
Question 1;
This question tests tax treatment and calculation for citizens as either resident for tax purposes
and as non-resident for tax purposes. Australian Tax Office has outlined different tax calculation
and approach in dealing with incomes from these individuals i.e. resident and non-resident for
tax purposes whereby there is the use of different tax range brackets involved in the calculation
(Handley, 2008.p.90.) These brackets are;
For Tax Resident Individual;
Taxable Income Tax on this income
0-$18200 Nil
$18201-$37000 19c for each $1 over $18200
$37001-$87000 $3572 plus 32.5c for each $1 over $37000
$87001-$180000 $19,822 plus 37c for each $1 over $87000
$180000 and over $54,232 plus 45c for each $1 over $180000
While for Non-Resident Tax Individual is;
Taxable income Tax on this income
0-$87000 32.5c for each $1
$87001-180000 $28275 plus 37c for each $1 over $87000
$180001 and over $62,685 plus 45c for each $1 over 180000
Q1 (a) An Australian Individual resident for tax purposes who earns a taxable income of 15000
Australian Dollars is subjected to the tax bracket of resident individual where his income lies in

TAXATION
3
the range of between 0 dollars to 18200 dollars whose tax amount portion on his income defined
within this bracket is a nil amount hence a resident earning 15000 is exempted from paying tax
because he is below the 18200 tax threshold.
Tax payable=nil or zero
Q1(b)A similar amount of 15000 Australian Dollars owned by a non-resident is likewise
subjected to the tax bracket of non-resident 0-$87000(it lies between 0 to 87000) hence eligible
to pay the tax of 32.5 cents for each 1dollar earned hence calculation is;
Tax Payable=15000*32.5/100=$4875
Q1(c) Australian companies’ taxable income of 15000 Australian Dollars, on the other hand, is
seen to take a different approach for taxation purposes whereby they are not based on tax
brackets instead they are calculated using base corporate tax rate of 27.5% hence the 15000AUD
is multiplied by 27.5%,
Tax payable=15000*27.5/100=$4125
Q1 (d) a resident with a taxable income figure of $155000 is eligible to pay the tax within
bracket;
Taxable Income - Tax on this income
$87001-$180000 - $19,822 plus 37c for each $1 over $87000
Hence he is eligible to pay the base rate of $19822 thus calculating the over amount tax aspect.
The over amount=155000-87000=$68000, this, therefore, is what that is taxed hence=
=68000*37/100=$25160
Tax Payable=25160+19822=$44982
Q1 (e) A non-resident earning the same amount of 155000 is however subjected to the tax
bracket serving the foreign citizens by using the tax bracket;