Australian Taxation and Deductions for Individuals

This assignment delves into the world of Australian taxation, exploring rules and regulations for individuals. It examines how to claim deductions, understand tax-free thresholds, and navigate student tax returns. With a focus on practical application, this report provides a comprehensive overview of taxation in Australia.

TAXATION LAW

Table of Contents
INTRODUCTION...........................................................................................................................1
Question 1........................................................................................................................................1
1. Frequent flyer points...........................................................................................................1
2. Crane hire company received amount................................................................................2
3. Free overseas holiday.........................................................................................................2
4. Excessive fund increased....................................................................................................3
5. Payment made to football player........................................................................................3
6. building apprentice qualification........................................................................................3
7. Art management.................................................................................................................4
8. expenses over work modification.......................................................................................4
9. Transportation expenses home to office.............................................................................5
10. Employee transportation expenses...................................................................................5
PART 2............................................................................................................................................5
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Australian taxation office may be served as a statutory body or agency that is assigned
with the responsibility to administer all the financial obligations. With the motive to determine
suitable tax liability or obligations of individuals several laws have been framed and introduced
by Australian authorities. Hence, rules presented by the Australian authorities are highly
significant which in turn helps individuals in assessing the amount for which they can claim. The
present report is based on varied case situations which will describe the manner in which
different items such as income or expenses are treated as per Australian taxation system. Further,
it will also shed light on the reasons why specific amount pertaining to income as well as
expenses considered or excluded while determining tax liability. Taxation helps government of
Australia in generating the favourable amount of revenue. It can be the source of their fund
generation. There can be some areas where the taxes are exempted at some transactions and it
can be levied at some points.
Question 1
1. Frequent flyer points
Webjet is Australia's one of air travel organisation which books tickets online and
provide the satisfactory services to its consumer. The company has provided frequent flyer
facilities to those travellers who use air travelling more than any other transportation. Points can
be generated by travellers as per their each travelling session with this air line firm. As per the
case a business analyst travels though this organisation and the payments are to be made by its
consultancy firm which deals in travel business. Tourism company gathers more clients and they
book tickets at bulk or in large numbers so these can be better way earning than with the help of
commission (Braithwaite, 2007). ATO has provided essential laws that will help consumer in
protecting them with taxation over such facilities. According to flight reward of TR- 1999/6
buyers receives rewards or generated the points on travelling with any air line services are free
from paying taxes on such things. It comes under consumer loyalty program which supports
costumers in taking the advantages of each points they have generated from flights. It is to be
suggested that the client need not to make any tax payment as it is fully allowable and exempted
under such sections of the law.
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2. Crane hire company received amount
Organisation gives cranes on hiring facilities which must be on the contract agreements
signed by both the individuals. The contract agreement must have mentioned all the terms and
condition levied on which the organisation deals with buyers. In this case the company have
facilitate client with its hiring services on the specific duration of time. After the completion of
work duration the client return the used crane which is damaged and not in the condition to use
again but he has made payments for such it (England, 2016). The damaged crane is the
responsibility of the consumer so there can be use of penalties or a kind of monetary punishment
to buyer. There can be rules and regulations over the agreement statement as per the facilities of
providing products on hiring basis. Hiring crane can be exempted from the GST levitation, it is
free from implication of such taxes over it. The hiring include around 4% of interests can be
levied on it the buyer has to make the payments of it.
3. Free overseas holiday
The contract can be done in proper consideration and consciousness as that can be
beneficial for both parties who are signing the agreement. The nightclub manager receives the
free holiday package that can be good or beneficial for him to take family on a tour and spend
some time at any place. Various company gives the overseas to their distributors as an reward or
gift to make short trips at some places. Manager receives that holiday overseas from an alcohol
supplier which is probably the gift for manager. Holiday package is exempted as per the
condition over it is that it is free of cost which means all the expenses are to be paid by such
company who are organising it. Charges occurred on travelling like transportation expenses, food
and services and hospitality facilities that can be bear by travelling firm who are bringing
consumers at tours (Fraser, Weier, Keane and Gartner, 2015). Nightclub manager is free from
paying any sort of taxes or expenses occurred on this tour. Under ATO, government has marked
that taxes levied on free overseas travelling are fully exempted or if taxpayer made any payment
in respect of it it will full returned. Overseas can be defined well under TR (IT 2650), it includes
total duration of individual at overseas country. It is to be advised that client must share the
detailed information about time duration he has spend in holiday at various location and also
provide the essential documents. Taxes can be exempted and taxpayer need not to make any
payment in regarding payment of such taxes.
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4. Excessive fund increased
Canoes are used for adventurous sports, there can be various tournaments and
competition regarding with this gamer. This become a business in current times there can be
various clubs or academies who organises sports. Canoe club who has raised funds and showed
excessive expenses over purchase of new canoes (Woellner and et.al., 2011). This can be
denoted as the fraudulent act and the taxpayers has provide information regarding payments
made on the purchase of canoes. They should provide the statements which mentions all the
necessary details regarding the prices and rates of each product to be purchased and the total
amount was spend over these expenses. This can be the void as the organisation is taking the
advantages of the granting redemption by the governments that can be beneficial for the clients
but it will be the fraudulent act. The consumers has to make payments of the taxes and they
should make the essential payments to the taxes levied on them. If the client is not doing any
fraud than he has to mention detailed document that reflects all informations about the individual
and the expenses done by him. This can be exempted as in some conditions were the legal
authority on the legislation of such taxes.
5. Payment made to football player
Awards and rewards are to be treated as the gift to an individual. The football players is
being gifted for the best and fair play at the Australian Football league. It is the talents gain by
the footballer which can be treated as to meet the challenges the in games and has performed
upto the expectations of the game. The television company is the commercial organisation and
gifted the footballer is their personal interest. There can be influences of the government and the
taxation. Television organisation has to make payments on gifting the payments to footballer.
They can be doing a sort of adjustment of their funds by granting the amount to the player. The
taxes can be levied as per the CGT law (Gans, 2016). As per this law the taxpayer is legible of
paying the taxes on the whatever capital gained by them, so the footballer has to make payments
of taxes on the income generated by him during the matches. He must disclose the details about
the sources from where he gain the revenue and generated the income. If the government found it
is of no use than it can be return to him as the income tax return. It is to advised that the player
has to make payments of the taxes and with following all the legal rules and regulations. This can
be counted in the luxury payments made to the football player it can be exempted of can be
taxable.
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6. building apprentice qualification
Apprentice and the trainee are the same terms where the individuals learns the work and
paid something in consideration to his work. There can be various rule and regulations are
designed by the government authorities of Australia as to give advantages to the employees. The
apprentice program can be done by the authentic organisations which are registered under RTO
the registered training organisation. They are to be well known of all legal norms and conditions
to be flowed and the necessary requirements of the employees can be fulfilled. The qualification
required by the construction firm that can be possible only through the practical knowledge given
to trainees as to provide them the information regarding the work (England, 2016). Organisations
which are facilitating the services of providing training to the employees must mention all the
details regarding the employee like name, address, training period, qualification owned by the
trainee and etc. the agreement must contains the detailed information about the company's legal
process of making payments to the employee which must includes the following details like, date
of joining, pay-offs to be made to the worker and if the trainee is doing internship than there
must be mentioned records of the duration has to be completed by the trainee on this purpose. It
is to be suggested that the organisation must be registered in RTO as per the rules set by
Australian government in favour of the trainees or the employees.
7. Art management
The courses other than the educational need of an individual are to be denoted as the
luxury courses because the client is well educated and want to learn something other than
educational course. These courses can be helpful form him to gain the knowledge about the art
management and may be he can become the art director (Howard, Gordon and Jones, 2014).
These courses belongs to his areas of interest not theses are not the necessary need of the
individual. It is to be advised that the client is not suppose to be benefited with deductions. He
cannot claim the deductions he must pay the taxes and it can be chargeable in some conditions.
The basic need of education for every country is to remove the illiteracy from the nation and
every single individual has the knowledge of language that he can easily speak, write and read.
Here the basic need of the client is fulfilled and he is applying for the further studies which are
luxurious for him. As per Australian educational act the expenses over education can be
deductible as per the needs of the individual, the luxurious courses will have to be charged with
taxes.
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8. expenses over work modification
Expenses done as to make improve the workplace can be exempted. Many organisations
has their own uniform and provides make-ups to their employees such as the entertainment
industries, hospitality sector and the sir line sectors. Thus the taxpayers can claim the deduction
over the cloths or uniforms they use as the identity of their staff. They are liable to claim the
deduction and the taxes are fully exempted or allowable here (Studying in Australia. 2017).
There must be proper information regarding number of employees working in the organisation,
the expenses can be made by the company in providing dresses to them, purchase of make-up
and other cosmetics for their employees, these all are the necessary details which are to be
mentioned in the report as if the client is deciding to claim deductions over it. As per ATO,
suggestions can be made that client is able to claim the deduction over expense made by
organisation for make-up and dresses.
9. Transportation expenses home to office
Travel between home and workplace can be denoted as expenses occurred by client for
the personal use. It can be said that it is an individual liability which has to paid by the taxpayer,
but it can be exempted as in some conditions where the organisation can make payments for the
travelling expenses of their clients. As per norms set by ATO travelling expenses can be
deductible as client claims that these expenses are not to be denoted as the personal expenses and
the all expenses can be bear by workplace. If the allowances facilitates by the firm heads for their
employees than it can be easy and favourable for clients to claim over such deductions. It can be
said the if the documents contains the allowance from the entity of the employee in relation with
providing him the travelling allowances than it will be exempted and the client would not forced
to make payments, other wise it is to be marked as the personal expenses of the employee and it
cannot be exempted (Foreign income. 2017).
10. Employee transportation expenses
Transportation between offices or employees for the official purpose than the client can
claim the deduction or exemptions over such travelling costs. Thus, travelling is done for the
organisational purpose it is not the personal expenses of the worker, so here he is not marked as
to pay taxes over it (Tax-free-threshold. 2017). The expenses can be bear by the company or the
workplace of workers. There can be allowances mentioned in the contract agreement of the
employees with the organisation and as per the legal norms or rules set by ATO, the tax can be
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deductible on transportation as the travelling can took place between offices and employees, this
denotes the travelling is done for the official purpose it is not the personal use of employees. The
client is able to claim the deductions over this sort of official expenses.
PART 2
Calculating tax payable for the year of 2016-17
Particulars Amount (in $)
Revenue (Amount received by working as an part time
accountant) 26800
Total income 26800
Spent amount on studies 18500
Expense for computer and printer 2000
Spending money for purchasing mobile phone 500
Total expenses 21000
Assessable income 5800
Tax liability (15.5%) 899
Income after taxation 4901
Interpretation: The above depicted table shows that tax liability of Manpreet for the
accounting year 2016-17 accounts for $899 respectively. In this, revenue earned by Manpreet
from part time job and considered for the tax liability implies for $26800. The rationale behind
this, Manpreet is in Australia from more than 6 months for the purpose of study. In accordance
with such aspect Manprreet is a resident and not entitled to pay tax on initial income amounted to
$18200 (Tax-free-threshold, 2017). Thus, after deducting such amount from $45000 gross
income is determined.
Reasons for including and excluding specific items
Identification of tax liability
Rules mentioned in Australian taxation clearly entails that international students who are
working part-time in Australia are obliged to fulfill tax liabilities or obligations. Hence,
international students are entitled to pay on an average 15.5% tax on their earnings. Along with
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this, income tax rules exhibits that any individual or student who enrolled in Australia from the
period of last six months or more recognized as resident (Student-tax-return. 2017). In other
words, it can be said that individual or international students who is studying in Australia and
completed more than 6 years is entitled for the tax purpose as a resident. By taking into account
such aspect it can be said that Manpreet is entitled to pay tax on the income generated during the
concerned financial year.
Further, international students have right to get benefits from the Australian taxation
system to the significant level. It includes tax free threshold, tax offsets and lower or reducing
tax rate as compared to the foreign residents (Studying in Australia, 2017). In addition to this,
rules presented by Australian taxation office shows that usually overseas students enter in a
foreign country on a temporary visa basis in which they are considered as temporary resident. In
this, foreign income earned by temporary residents is not taxed in Australia. On the basis of the
cited case situation Manpreet went in Australia with the motive to get an accounting degree at
CQU.
Foreign income justification
In this, it is assumed that Manpreet is studying in Sydney on the basis of visa. This aspect
shows that Manpreet is not obliged to pay any tax on foreign income. Along with this, given case
scenario clearly presents that $10000 received by Manpreet from the trust set-up by her
grandmother. Besides this, tax was already paid by her amounted to $1000 in the form of foreign
obligation. Hence, each payment is come under the category of taxation only for once. In
accordance with such aspect amount is not included while determining tax liability or obligation
(Foreign income, 2017).
Tax exempted income/ amount that is not considered as revenue
From assessment, it has been identified that Australian taxation authorities have distinguished
tax free income in different parts such as exempt, non-assessable and other amounts. All the
three categories furnish information about the income on which concerned authority is not liable
to pay any tax. As per the Australian laws and legislation Manpreet is not entitled to present or
declare the income that is received in the form of support for educational purpose. By
considering this, money amounted to $20000 sent by the parents are not considered at the time of
calculating tax liability.
Mobile phone expenses
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As per Australian taxation individuals can claim for work-related deductions. On the
basis of such aspect, money such as $500 incurred for new mobile in relation to work purpose.
Thus, Manpreet is entitled to claim for the deduction of expenses incurred for performing work
related activities.
CONCLUSION
From the above report, it has been articulated that Australian taxation office presented all
the rules in relation to treating with income or expenses in a segregated manner. In each section,
Australian authorities have clearly described the extent to which one can claim for the expenses
and income related deductions. Besides this, it can be inferred that Manpreet is obliged to pay
$899 in the form of tax liability. It can be seen in the report that several deductions have been
enjoyed by Manpreet as per the rules of ATO. Further it is to be concluded that there can be
allowable deduction provided to the individuals as per conditions. These allowances can be listed
in the acts of ATO and related laws of the Australian government.
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REFERENCES
Books and Journals
Braithwaite, V., 2007. Responsive regulation and taxation: Introduction. Law & Policy. 29(1).
pp.3-10.
England, P., 2016. Between Regulation and Markets: Ironies and Anomalies in the Regulatory
Governance of Biodiversity Conservation in Australia. 1 Australian Journal of
Environmental Law, p.44.
Fraser, D., Weier, M., Keane, H. and Gartner, C., 2015. Vapers’ perspectives on electronic
cigarette regulation in Australia. International Journal of Drug Policy. 26(6). pp.589-594.
Gans, J., 2016. Modern criminal law of Australia. Cambridge University Press.
Howard, S. J., Gordon, R. and Jones, S. C., 2014. Australian alcohol policy 2001–2013 and
implications for public health. BMC public health. 14(1). p.848.
Woellner, R., and et.al., 2011. Australian Taxation Law Select: legislation and commentary.
CCH Australia.
Online
Foreign income. 2017. Online. Available through: <https://www.ato.gov.au/Individuals/Income-
and-deductions/Income-you-must-declare/Foreign-income/>. [Accessed on 5th September
2017].
Studying in Australia. 2017. Online. Available through:
<https://www.ato.gov.au/Individuals/International-tax-for-individuals/Coming-to-
Australia/Studying-in-Australia/>. [Accessed on 5th September 2017].
Tax-free-threshold. 2017. Online. Available through: <
https://www.ato.gov.au/Individuals/Working/Working-as-an-employee/Claiming-the-tax-
free-threshold/>. [Accessed on 5th September 2017].
Student-tax-return. 2017. Online. Available through:
<https://www.taxback.com/en/australia/student-tax-return/>. [Accessed on 5th September
2017].
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