Australian Income Tax Law Analysis
Added on 2020-03-04
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Running head: TAXATION LAW AND PRACTICETaxation Law and PracticeStudent’s Name:University Name:Author Note
1TAXATION LAW AND PRACTICETable of ContentsPart A.........................................................................................................................................2Part B..........................................................................................................................................4Part C..........................................................................................................................................5Part D.........................................................................................................................................6Part E..........................................................................................................................................7References:.................................................................................................................................9
2TAXATION LAW AND PRACTICEPart A1.The primary source of the Commonwealth Parliament’s Taxation can be found undersection 51(ii) of the Australian Constitution (Chordia, Lynch, & Williams, 2013).2.The primary source of Australia’s taxation laws is roughly, the parliament, courts andgovernment departments or statutory authorities. The taxation laws are derived fromthe Commonwealth Constitution and the rules and regulations of its internationaltreaties, as well as many Double Tax Agreements (DTAs) done with foreign countries(Whait, 2012).3.Taxation Ruling TR 98/17 discusses essentially the meaning of the word resides, inrespect to the definition of the word resident in the Income Tax Assessment Act, 1936under subsection 6(1). This ruling applies to probably all the individuals visitingAustralia including students living in Australia for academic purposes or migrantsresiding in Australia or contractual employees. The ruling however is not applicablefor residents of Australia who have been living overseas for a temporary period oftime. The word resides generally means a person dwelling in a particular place for aconsiderable amount of time (Kobetsky et al., 2012). However under the definition ofthis ruling, the period of stay of a single individual is not the determining factor inregards of he or she being the resident of Australia. An individual is considered aresident of Australia on the grounds of quality, character, behavior and habit of thatparticular individual. Furthermore the living and social standards, business links,location and preservation of assets, are also monitored and evaluated. The consistentmaintenance of behavior along with the residing status is the determining factor for anindividual to gain residential status of the country. Now to explain the meaning of theterm resident or resident of Australia in legal terms, a resident is a person who is
3TAXATION LAW AND PRACTICEliving in Australia continuously or intermittently for a part or half of the income yearand has an intention to take up resident status in Australia. An individual’s purpose orreason of stay in Australia also acts as a determining factor in ensuring whether he orshe resides in Australia or not (Harding, 2012).4.Medicare levy is a service provided by the government of Australia which lies in thedomain of public health care. A resident, who pays the taxes regularly and has anannual income of $26,668 per year, he or she has to pay a Medicare levy of twopercent which is always calculated on the respective taxable income of the taxpayer.For an instance if the total taxable income of an individual is $60000, then theMedicare levy of two percent that is $1200 will be payable by him. Therefore anyresident having taxable income that is greater than or equal to $26,668 will have toMedicare levy will be reduced and earnings below the minimum level will have zeroMedicare pay a Medicare levy of two percent. In case the taxable income is below thelimit then the levy applied on it (Taylor, 2012).5.The Division of the Income Tax Assessment Act 1997 that denies a company that hasbeen fined under Commonwealth consumer legislation for engaging in misleading anddeceptive conduct from deducting the costs of the fine is 3(G)5 (Taylor & Richardson,2012).6.A specific deduction is an expense or loss which can be deducted under a specific or aparticular provision of the Tax Acts except section 8-1 of the ITAA 1997. NowSection 25-45 ITAA97 specifically involves deduction in respect to a loss due toevents such as embezzlements, theft, larceny or defalcation on the part of thestakeholders or taxpayers. Thus the deduction under Section 25-45 ITAA97 is aspecific deduction (Boccabella, 2012).
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