Australian Taxation Law- Assignment

TAXATION LAW

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
QUESTION 1...................................................................................................................................1
A) Section that confer taxation power in Australian taxation system.........................................1
B) Role of court, parliament and ATO in developing taxation law............................................1
QUESTION 2...................................................................................................................................2
QUESTION 3...................................................................................................................................2
A) Property has been owned by Indianna since 1 November 1976............................................3
B) Property has been owned by Indianna since 1 November 1986............................................3
Assessable income receiving.......................................................................................................3
Question 4........................................................................................................................................4
Whether interest on loan can be claimed as a deduction or not..................................................4
QUESTION 5 ..................................................................................................................................4
Calculation of net capital gain or loss ........................................................................................4
Question 6 .......................................................................................................................................5
Sourcing two articles from Australian Financial review.............................................................5
Question 7 .......................................................................................................................................6
Code of conduct of tax agents.....................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................8

INTRODUCTION
Taxation law refers to different statutory, common rules and regulations related with the taxation
of a country. The Report will describe the rules, regulations of Australian taxation law. The
Report will also explain the importance of courts and ATO in proper development and
implementation of laws related with taxation of Australia. It will also describe the code of cnduct
to be followed by tax agents.
QUESTION 1
A) Section that confer taxation power in Australian taxation system
 Section 51 (2) confer taxation power in Australian taxation system. This section clearly
explains that parliament have power to make laws or it shall be subject to constitution. It
can enact laws of taxation but it should not create discrimination between states. It states
that commonwealth must impose taxes uniformly (Woellner and et.al., 2016).
 Section 90: this section looks upon imposing customs and excise duties. This section
ensures achieving federation objective by developing uniform trade relations with other
countries.
 Section 53: Senate cannot make changes in legislation or cannot amend any bill that deals
with taxation. Hence, this section restricts power of senate.
 Section 114: This section states that it is essential to take consent of others before laying
tax on state property or commonwealth property.
 Section 55: This section declare that legislation related to imposing tax will be operative
and rest other provisions will be inoperative (Eslake, 2015).
B) Role of court, parliament and ATO in developing taxation law
Role of parliament
The theory of segregation of power ensure minimising or avoiding maltreatment of power
and protecting citizen’s freedom. Parliament has power to make law under Australian
Constitution system. There are three main elements of parliament: queen, general and two
houses. Proposed law is presented in front of both houses of parliament and accordingly any law
gets executed practically. Parliament is responsible for making tax polices. It always implements
regulations after discussion with Australian treasury.
Role of ATO
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Executive branch is responsible for implementing any law which is passed and approved in
parliament. ATO implements purposive approach in which it ensures that passed legislation is
accessible and friendly enough. ATO can influence law design and it can take decision for
legislative changes in order to provide benefit to tax payers. Collection of revenue is done by
ATO on behalf of government of Australia (Martin and Xiang, 2015). ATO is responsible for
administration of tax and its superannuation which are passed by parliament. ATO has to play
the role of administrator which helps in implementing tax law in country in systematic manner.
Furthermore, it gives advices to taxpayers and make them aware with their rights and
obligations.
Role of court
Court or judiciary plays the role of interpreter, it has duty to interpret all the requirements
and essentials of enacted law. Court plays the role of dispute resolutely authority as any kind of
legal disputers related to tax law are resolved by court.
QUESTION 2
Double taxation agreement states that person needs not to pay twice tax on same income if
individual earn income from two or more countries. This agreement clarifies that which country
has right to get tax over an individual income. Australian resident has to pay tax of income
generated by person through worldwide resources whereas non Australian resident has to pay tax
on income which is generated from Australian resources. In order to minimise the issue of
paying double tax government has made Double taxation agreement (DTA) (Chomik and
Piggott, 2016).
A non-resident manufacturer which belongs to US, drive profit from sales to Australian
customers. Sales representative has been instrumental in obtaining orders from Australian
consumers. In this case profit from the Australian sales by US manufacturers is taxable in
Australia.
Tax treaties can be defined as formal bilateral agreement between various countries.
Australia has made tax treaties with many nations or more than 40 regions. Tax treaties provide
facility to the source country or give taxing rights. If the person is generating any kind of income
from selected sources, then individual is liable to pay tax to Australian government. Hence, US
manufacturer will have to pay taxes on lower rate in that foreign country (Bentley, 2019).
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