Australian Taxation Law Assesment

Running Head: AUSTRALIAN TAXATION LAW
Australian taxation law
Name of the Student:
Name of the University:
Author Note

1AUSTRALIAN TAXATION LAW
Table of Contents
Answer to the Question.....................................................................................................2
Reference list.....................................................................................................................5
Bibliography........................................................................................................................5

2AUSTRALIAN TAXATION LAW
Answer to the Question
Issues
It is an important process for the income tax department to determine the
residential status of the individual and a company for the purpose of the tax purpose. It
plays an important role in the decision making of person taxability and their tax filing.
Mainly the resident test is done to determine the Australia residence. The Australian
Tax Office or ATO is the prime authority to control the tax matters of the Australia. They
had established many standards and regulation in order to determine the tax. This
standard specifies the rules and regulation that an individual need to follow under the
ATO (Ato.gov.au. 2020).
Rules
According to the Income Tax Act 1997 an individual is considered as the
Australian resident if he or she lives in Australia and is always taxable under the
Australian tax rules. It also applies to all those who staying in Australia for over six
months until they show any intention of leaving Australia on a permanent basis (Anon
2020). An individual is considered as the resident of Australia even if he or she moved to
any overseas for the purpose of work, study or any other purpose. For the purpose of
determining the residential status, ATO has released few tests that are required to be
conducted in order to determine the residential status is as follows:
1) Common law test: According to the income tax act 1936 under subsection 6(1) an
individual is considered as the Australian tax resident if he or she lives in Australia.
This law is based on the intention of the individual presence in Australia, individual
living and social arrangements, location of the individual assets, family and business
or employment within Australia.
 Resides test – Under the Income Tax Act 1997 subsection 6, resides test
determines whether an individual is a resident or non resident of Australia. It is the
first test where an individual residency is determined for the tax purpose. Under this
test an individual lives in Australia are considered to determine the Australian