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(Assignment) Australian Taxation Law

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Added on  2020-02-24

(Assignment) Australian Taxation Law

   Added on 2020-02-24

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Australian taxation law
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(Assignment) Australian Taxation Law_1
Answer to Question 1
Answer of Question i)
Aviation companies reward their loyal customers with flight points under Taxation
Ruling of TR 1999/6. Under this taxation ruling, companies in aviation sector reward their
customers by providing flights points. The fact is that rewards or points that are provided by
companies in aviation sector are not treated as taxable income under Taxation Ruling of TR
1999/6 (Barkoczy, 2016). Nonetheless, there can be implementation of fringe tax benefits on
rewards or scenarios. Such tax benefits can be imposed under the following situation and they
are listed below:
If the employees are rewarded with flight points for some type of arrangement.
Employer and employees share a relationship of family. Employees receives rewards
or flights points from employers in relation and in context to their employment.
Therefore, frequent flyer rewards received by business analyst in relation to work
related travel by organization would not be subjected to taxation and neither it will be treated
for fringe taxation benefits.
Answer of Question ii)
The amount that is received as a compensation by an individual or entity are not
considered for the purpose of taxation or it is not assessed as under taxation income. Under
the given scenario, crane-hiring company is receiving amount for customers as compensation
for damage due to supplying damaged crane (Blakelock & King, 2017). Here, compensation
is paid at time of providing service and receivers of compensation are liable to charge for
taxation. Some of crucial points that can be reflected here are as follows:
(Assignment) Australian Taxation Law_2
Refurbishing the damages assets part are done by amount of compensation that is
received by hiring company. Utilization of received compensation amount is done by
refurbishing the assets damaged arts.
Entities receiving compensation amount should have assets that would be dynamically
utilized in their business process and they should be in capital form.
Assets of entities must be depreciable and estimated depreciation should be
determined concerning assets that are in record.
In the given scenario, there has been damage to customers capital assets and in this
regard, crane hiring company has received the compensation value. If the above conditions
are fulfilled, then the amount is not included for taxation purpose and they are not taxable
Answer of Question iii)
Cash or gift in kind received by individual does not form part of income component
according to Australian Taxation Office. Such component are exempted and they form
neither part of non-assessable income nor part of non-exempted income. When computing
income tax on an individual, value of small gifts received does not form part of computation
and hence they are excluded (Campbell et al., 2016). On other hand, some big gifts received
by individual would be assessed for income tax purpose in the event when they are able to
convert into cash.
Therefore, nightclub mangers of an alcohol suppliers has received free package of
Free Overseas holiday. Hence, for computing nightclub manager income tax, it is essential to
include the package received by him.
(Assignment) Australian Taxation Law_3
Answer to Question iv)
Canoe club for buying additional canoes raised excess funds and this extra amount
was returned to their members. When calculating income tax, extra money raised for buying
canoes are not included in the same. The reason this part of funds would not be included in
calculating income tax is that, as they have not been raised as an alternative funds raised that
members provided. Funds raised was not for acquiring purpose and it did not display separate
requirement (Nossaman & Wyatt 2016).
Answer of Question v)
The Taxation Rulings TR 1999/17 includes the gains or gifts received by sportsperson
for performing fairly and due to their best performance on field. According to taxation rule,
the amount that is received by sportsperson as gifts or any cash received by them are subject
to taxation. In addition, if such receipts of gifts or cash accumulate form part of their income.
Therefore, as per normal taxation concept, payment received by Australian footballer by
Australian television for best and fair performance should be included in their income tax
calculation (Kingston, 2015).
Answer of Question vi)
Taxation Ruling of TR 95/22 depicts components such as allowance, reimbursing
employees and construction. Building of employees and construction include the following
components according to Taxation Ruling of TR 95/22.
Carpenter, apprentice and trainees
Labour involved in carrying out construction of building\
Project manager in the construction site is engaged in constructing building and many
(Assignment) Australian Taxation Law_4

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