Tax Laws and Rules - Assignment

Taxation law

Table of Contents
INTRODUCTION...........................................................................................................................1
QUESTION 1...................................................................................................................................1
QUESTION 2...................................................................................................................................1
QUESTION 3...................................................................................................................................2
PART 1........................................................................................................................................2
PART 2........................................................................................................................................2
QUESTION 4...................................................................................................................................3
QUESTION 5...................................................................................................................................3
QUESTION 6...................................................................................................................................4
QUESTION 7...................................................................................................................................5
CONCLUSION ...............................................................................................................................5
REFERENCES ...............................................................................................................................6

INTRODUCTION
Taxation is a term given to the revenue which is collected by government authorities in
terms of imposing various taxes (Buehler and Pucher, 2012). It is mostly referred to as an act.
This report contains the detail information about constitutional framework of Australian
Taxation System. It also provides solution to various problems related to taxation.
QUESTION 1
A) Australian taxation system is known as one of the most complex taxation system in the
world which is made up of approximately 125 various taxes it also includes common wealth
taxes such as Income Tax, Fringe Benefits Tax, Capital Gains, Goods and Services Tax and
many more (Devos, 2012). Australian Constitution confer the power to impose the Tax on the
commonwealth under section 51(ii). The powers under Australian Constitution in section 51(ii)
consist of various powers such as concurrent Powers i.e., income tax, exclusive power which
includes custom and excise duty and residual powers includes stamp duty, payroll tax and land
tax.
B) Separation of powers: In the separation of power political theory it determines the three
powers such as The legislative power which makes the law for the country, The executive power
who governs the executive of law and enforce it and the Judicial power in order to interpret law
enforced to maintain balance on each other. Role of Parliament is to make laws for the benefit
and safety of its citizens, role of ATO is to execute the law which is made related to taxation
system and the Courts has the role to check and balance these two authorities and interpret the
law.
QUESTION 2
Double Tax Agreement: Double tax agreement is a bilateral formal agreement between
two countries which helps in prevention of double taxation. This is an agreement which help
government of both the companies to levy tax and avoid double taxation on same income. It also
provide a security level for the Tax rules which is applicable to particular transactions done
internationally (Faccio and Xu, 2015). It specify the rules in order to resolve claims related to the
status of residence of taxpayer and the source through which it earned income.
In the above given case the Australian income which a non resident US manufacturer has
earned is taxable as per the Australian Taxation Office. Under Division 13 sub sections
1