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Principles of Taxation Assignment

Added on - 23 Nov 2020

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Principles oftaxation
Table of ContentsQUESTION 1...................................................................................................................................1QUESTION 2...................................................................................................................................3QUESTION 3...................................................................................................................................3REFERENCES................................................................................................................................2
QUESTION 1IssueIn the given case Mr. S who is living n Kuwait for a long time and is earning their withhis job as engineer. In income year 2017-2018, decided to leave his job to come permanently toAustralia to live with his family in the house which they own for a long time. He came toAustralia on 29thApril 2017. he used to visit his family quite often, the commissioner of tax heldthat he is a resident of Australia and his overseas income must be charged to tax.RulingsIn Australia both residents and non resident both are taxed on their domestic income.The rules laid down for residents are applicable to foreign in come of those resident as well(Cobiac and et.al., 2017). Residents who have foreign income in their total income are taxes onoverall income while non residents are taxed on domestic income only.For determination of status of an individual in Australia two test are applied to check whether he/she was resident or non resident in previous year:Income Tax Assessment Act 1936 (ITAA36)Section 14 ZZE:Residency ruleCommon law test:a person is said to be tax resident in Australia if he/she resides in Australiaas per section 6(1) of income tax assessment act, 1936(Residence,2018). this can bedetermined through:intention of presence of that person in Australiathe extension of business or family of such individual in Australialocation and maintained of assets of individualliving and social arrangement of individual in Australia.Statutory tests: this is a rule set for determination of residential level of an individual inAustralia with relevance to facts and circumstances (McGee, Devos and Benk, 2016). InAustraliaa person is deemed to be a resident in the country if he/she spends half of their incomeyear (183) days in Australia unless they set up a place of resident outside Australia and sono intent to come back to the country.The domicile (permanent place of resident) of the individual is in Australia1
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