Taxation Law: Fringe Benefit Tax Assessment Act 1986

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
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1TAXATION LAW
Table of Contents
Answer to question 1:.................................................................................................................2
Issue:..........................................................................................................................................2
Laws:..........................................................................................................................................2
Application:................................................................................................................................5
Conclusion:................................................................................................................................6
References..................................................................................................................................7

2TAXATION LAW
Answer to question 1:
Issue:
Will the taxpayer be held liable for taxation under the Fringe Benefit Tax Assessment
Act 1986 relating to the tax consequences that arises from the transactions reported during the
income year?
Laws:
As stated under the “section 6-1 of the ITAA 1997” income obtained from the
personal exertion or income obtained from the employment are treated income under the
ordinary concepts (Burton, 2017). These includes the wages, salaries, commissions,
allowances, superannuation contributions, gratuities or any type of proceeds that is received
from rendering any services. A taxpayer receiving receipts from the employment and
providing personal services may be treated for income tax purpose or may be subjected to
fringe benefit taxation. In order to classify the receipts as income it should have nexus with
the income generating activities of the taxpayer.
Nexus is obviously established for the items of personal services including the salaries
and wages, commissions or a type of ancillary payments that is made within the capacity of
labour. According to “Section 6-5 of the ITAA 1997” income made from the ordinary
concepts are treated as assessable under “ITAA 1997” (Grange et al., 2014). In most of the
circumstances income that is earned from the ordinary sources are treated as ordinary income
under “section 6-5 of the ITAA 1997”.
The lawful meaning of the term income is explained in “Scott v Commissioner
(1935)” where the income must be treated under the ordinary concepts and usage of mankind.
An element of income is obtained when the item comes home to the taxpayer (Jover-