Australian Tax Law Question Answer 2022

Running Head: TAX LAW
Tax law
Name of the Student:
Name of the university:
Author Note:

1
TAX LAW
Table of Contents
Question 1 (a)......................................................................................................................2
Question 1(b).......................................................................................................................4
Question 2............................................................................................................................6
Reference list.......................................................................................................................8

2
TAX LAW
Question 1 (a)
Residential status is an important factor to determine the tax. The Australian Taxation
Office (ATO) has made different standards and regulation for the immigrants and Australian
residents to determine their tax purpose. This standard ensures that an individual is taxed
according to the ATO if he satisfies the resident conditions.
Issues: Tompson Pondage is holding Germany passport visited Australia in the year of 2007 by
holding a work visa. His visa was permitted to work and live in Australia. In Australia, he
worked in a contract basis as a marine engineer on a sea barge. This company is an Australian
owned company. Soon this company is leased to a Malaysia based company that is Ocean
Development Limited and they were carrying out their work in China. Tompson accepted this
work and left Australia on 8 July 2015 leaving behind his wife and child in Australia. He worked
with the Ocean development limited for nine month and earned AUD $ 90000. After the end of
the contract with the Ocean Development he return back to the Australia and entered into his
wife business as partner.
Law: In accordance to the Residential Tenancies Act 1997 an Australian resident is always
taxable under ATO laws and regulation irrespective of where he or she lives. This is also
applicable to those who is residing in Australia for more than six month until and unless they
have any intention to live in Australia or having a permanent home in overseas (Braithwaite and
Wirth 2019). An individual is also considered as a resident of Australia if he or she moved to
Australia from overseas and shows the intention to stay there and make connection.
For assessing the residential status there are number of process which are as follows:

3
TAX LAW
 Resides test – Under the section 6(1) of the Income Tax Assessment Act 1997 this test
determines whether an individual is an Australian resident or not. It is the main test which
ATO uses to determine the resident status for the tax purpose. If the individual resides in
Australia then he or she is considered as an Australian resident for the tax purpose and if
this test satisfies, no other test is required to be applied (Anon 2020). Some of the
factors that are used to determine the residency status include physical presence, intention
or purpose, family, business, employment and living arrangement. If the individual does
not satisfy, reside test than other statutory test are need to be followed.
 Domicile test – Under the section 6(1) of the Income Tax Assessment Act 1997 this test
is the first statutory test where an Australian resident domicile is checked. This test
requires showing a permanent house or something that is more than a residence in the
Australia and if it satisfies then the individual is considered as the Australian resident for
the tax purpose (Braithwaite and Reinhart 2019).
 183-day test – Under the section 6(1) of the Income Tax Assessment Act 1997 this test
checks the presence of the individual in Australia for more than 183 days in a continuous
or with a break. If the individual satisfies the condition, he or she is considered as an
Australian resident until and unless the individual has a home in overseas or does not
have any intention to reside in Australia.
 Superannuation test – Under the section 6(1) of the Income Tax Assessment Act 1997 it
is the third statutory test which covers certain Australian government employees. This
test ensures that individual working at a overseas are treated as an Australian resident.
In accordance of the case Harding v Commissioner of Taxation residential makes a big
difference in the tax situation and an Australian resident is taxed worldwide which includes