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Taxation Ruling | Questions and Answers

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Added on  2019-11-19

Taxation Ruling | Questions and Answers

   Added on 2019-11-19

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Running head: TAXLawName of the StudentName of the UniversityAuthor’s Note
Taxation Ruling | Questions and Answers_1
1TAXTable of ContentsQuestion 1........................................................................................................................................2Answer to I..................................................................................................................................2Answer to II.................................................................................................................................3Answer to III................................................................................................................................4Answer to IV................................................................................................................................4Answer to V.................................................................................................................................5Answer to VI................................................................................................................................5Answer to VII..............................................................................................................................6Answer to VIII.............................................................................................................................7Answer to IX................................................................................................................................7Answer to X.................................................................................................................................8Question 2........................................................................................................................................8Calculation of Assessable Income.............................................................................................12Bibliographies................................................................................................................................13
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2TAXQuestion 1Answer to ITaxation ruling of TR 1999/6 deals with the reward of flight that the airline companiesprovide to the loyal customers1. According to this rule, the rewards received by the airlinecompanies are not subjected to taxation as the form of income. However, in case of thefulfillment of the following conditions, these rewards can be treated as Fringe benefits Tax:i.A family relation is there between the employee and the employer; and the employeereceives the reward as a part of his/her employment.ii.The employees receive the flight reward under some kinds of specific arrangement.The law of Taxation ruling TR 1999/6 states that the reward that the regular fliers receivefrom the airline companies needs to be taxed under the taxation law. The particular individualreceives the reward as he/she has been providing services and for this reason, they are entitled toget the rewards from the airline companies. This reward will be accrued with the services and forthe employers; these rewards will be treated as per the business expenses.Based on the above discussion, it can be observed that Webjet frequent flier pointreceived by the business analyst employed by the large business consultancy in relation to thework related travel will not be treated as per the taxable income. In addition, the taxationauthority will not impose Fringe Benefits Tax (FBT) on these kinds of rewards.1Barkoczy, Stephen, et al.Foundations Student Tax Pack 3 2016. Oxford University PressAustralia & New Zealand, 2016.
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3TAXAnswer to IIIn case, an individual receives compensation from the customers as a reply of any kind ofdamage for the capital assets at the time of providing services to the customer, the receipts of thatcompensation will not be taxable under the income tax law for the recipient2. In this situation, thefollowing points need to be considered:i.The type of the asset needs to be capital assets and the recipient should actively use thatasset for his/her business purposes.ii.The customer should receive the sum at the time of the damage to whom the service wasprovided with the help of the capital asset.iii.The received sum was used in order to repair the damaged part of the capital asset.iv.The capital asset needs to be depreciable in nature and there has been the record ofdepreciation on that asset on the regular basis3.Based on the above discussion, it can be said that the particular amount that Crane HireCompany received from the customer as a part of the damage compensations shall not besubjected to taxable under income taxation for Crane Hire Company for the fulfillment of theabove-mentioned conditions.2Davis, Angela K., et al. "Do socially responsible firms pay more taxes?."The AccountingReview91.1 (2015): 47-68.3Berg, Chris, and Sinclair Davidson. "Submission to the House of Representatives StandingCommittee on Tax and Revenue Inquiry into the External Scrutiny of the Australian TaxationOffice." (2016).
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