Income Tax Law Application and Calculation in Australia

TAXATION LAW
INCOME TAX LAW APPLICATION AND CALCULATION IN AUSTRALIA
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TAXATION LAW
Question 1,uses the below tax brackets for individual tax residents and non-resident while the
company and small business unit that has the turnover of below or equal to the 10m base and 2m
base both use tax rate percentage of 27.5%
Australian residence citizen uses bracket Abbott (2018.Pg.14);
Taxable Income Tax on this income
0-$182000 Nil
$18201-$37000 19c for each $1 over $18200
$37001-$87000 $3572 plus 32.5c for each $1 over $37000
$87001-$180000 $19,822 plus 37c for each $1 over $87000
$180000 and over $54,232 plus 45c for each $1 over $180000
While non-resident or rather foreign citizen, on the other hand, use the below tax bracket for the
individual citizen
Taxable income Tax on this income
0-$87000 32.5c for each $1
$87001-180000 $28275 plus 37c for each $1 over $87000
$180001 and over $62,685 plus 45c for each $1 over 180000
Q1 (a) A taxpayer in Australia who earns $15000 hence his income lies in bracket thus not
subjected to any tax he, therefore, pays nil tax.
Taxable Income Tax on this income
0-$182000 Nil
Q1 (b) for non-resident who earns the same amount $15000 his income ranges in the income
bracket of between zero and 87000 Australian dollars of foreign bracket;
Hence the tax payable in this case=32.5*15000/100=$4875

TAXATION LAW
Q1(c)Company tax rate is applicable at 27.5% and 30% depending with turnover base i.e.
turnover less than 10m Australian Dollars is subjected to 27.5% while those above 10m
Australian Dollars is subjected to 30%,thus, in this case, it is far below 10m base tier rate hence=
15000 * 27.5/100 = $4125.
Q1 (d) Australian individual who is a resident and earns $155000 uses the bracket range of
between AUD 87001 and AUD 18000 Australian.
Therefore the tax payable=155000 - 87000 = 68000 this the cover of 87000,
Hence = 68000 * 37/100 = 25160 what is taxed in excess therefore tax payable= 25160 + 19822
= 44982
Q1 (e) A non-resident earning 155000 uses range bracket of between 87001 and 180000,
Hence = 155000 – 87000 = 68000 excess, thus tax in excess= 68000 * 37/100 = 25160, tax
payable = 25160 + 28775 = 53935
Q1 (f) A company with income of 155000 is likewise within the base rate of less than 10m =
155000* 27.5/100 = 42625 is what is tax payable.
Q1 (g) A resident with income of 255000 applies bracket range of over 180000; thus 255000 is
more than 180000 with = 255000 – 180000 = 75000 hence = 75000 * 45/100 = 33700 hence tax
payable;
= 33700 + 54232= $87982.
Q1 (h) Non-resident = 255000 uses the bracket range of 180000 and over,
Hence =255,000+ (-180000) =75000
= 75000 * 0.45 = 33750, tax payable total = 33750+62685= $96435
Q1 (i) for a company with income less than 10m dollars i.e. 255000 is subjected to 27.5% =
255000* 27.5/100= $70125