TAXATION LAW TABLE OF CONTENTS INTRODUCTION 1 MAJOR PROJECT 1 Category 1 Category 2 - Assessable Income 1 Susie 1 Question 2 3 Baz Baxter 3 Category 2 - Allowable Deductions 5 Question 4 5 Waterside P
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TAXATION LAW
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1MAJOR PROJECT..........................................................................................................................1Category 1 – Assessable Income............................................................................................1Question 1...............................................................................................................................1Susie.......................................................................................................................................1Question 2...............................................................................................................................3Baz Baxter..............................................................................................................................3Category 2 – Allowable Deductions.......................................................................................5Question 3...............................................................................................................................5Carumba Ltd...........................................................................................................................5Question 4...............................................................................................................................7Waterside Pty Ltd...................................................................................................................7CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10
INTRODUCTIONThe taxation law can be levied by the governments of Australia as it includes various rulesand regulations on the several cases that are going to be solved in this report. Different lawswhich are imposed on the purchase and sales of the product. The breach of any contract, theimport and export of various goods. These can be followed by the several sections that will befruitful in giving the proper judgement over the cases. The judgement must satisfy all the partieswho are included in the contract and agreement. The various case has several differences in theirissues and laws regarding it.MAJOR PROJECTCategory 1 – Assessable IncomeQuestion 1SusieIssues: Payments made to Susie around $100,000 which is not refundable royaltyamount.No sales made during that period the royalty amount is the only amount which isever gain by Susie.Malaysian company wanted to credit the royalty paid to Susie.Law: Income tax Assessment Act, 1936 subsection 6(1). (s 6-10 (4))Common Law Royalty. 128B(9B)1Pape v Commissioner of Taxation [2009] HCA 23Discussion: Susie as an inventor of various machines which are most weird and amazing. She hasinvented the gardening equipment named "Dynamow" a lawnmower which has features of autoactivation with the voice commands. Susie gains the patent right over it and signed theagreement with a Malaysian company s6-1 ITAA36. Under the licensing agreement, she hasagreed to manufacture and produce the Lawnmower for Malaysian firm on which she has been1Income tax assessment act 19971
paid $40 for each mower 128B(9B). The organisation has made payment to her around $100,000on behalf of royalty which has the agreement of not refundable advance over royalty. Later theentity wants to get the amount back and has entitled for crediting the royalty (2B)(b)(ii)2. Duringthat period, there was no production made by Susie and no transaction over sales occurred in thecompany. There were no gains regarding the selling of any Mower. The amount of $100,000 wasthe only payments ever consumed by Susie. Recently in the current year under the licensingagreement if She made the sales of 200 mower which is in context with the same rates applied oneach mower of $40. The sum of the amount can be gain by licensee around $8000. As per thecase, the law can be implied of Australian Acts on royalty and property acquisition s6-1ITAA36. The case can be same as Pape v Commissioner of Taxation [2009] HCA 23.2 Income tax assessment act 19362
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