Taxation Law: Varying Nature of Tax Treatments and Consequences for Foreigners

Running head: TAXATION LAW
Taxation Law
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TAXATION LAW
Table of Contents
Introduction......................................................................................................................................2
Varying nature of tax treatments and consequences for foreigners.................................................2
Recognizing the tax treatment which differs for foreigners and residents......................................4
Impact of tax treatment for foreigners.............................................................................................9
Conclusion and Recommendations..................................................................................................9
References......................................................................................................................................11

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TAXATION LAW
Introduction
In general, a residence is identified as any person which is seen to be assessed under the
“s995 -1 ITAA97, s6(1) ITAA36”. As per this section residence is identified as a person who has
a domicile in Australia unless there is a significant satisfaction of a person’s permanent place of
abode outside the country. In addition to this, the residence of a person is also identified with an
individual who has been residing in Australia for more than half of the income year. The
application of the similar conceit is also applicable to businesses which has a place of
incorporation, control for voting power and central management control1.
The main extent of the study has covered various types of the aspects which are seen to
be associated to the discussion as stated under the various types of the extent for the
consideration of tax treatments in foreign business in Australia. The important nature of the
different impact of the taxation based on the residency has been identified the several types of
the discussions which are related to the tax residency and the implications on the business as per
test of residency. The differing nature of tax treatments for the individuals has been depicted in
terms of four broad tests. These are needed to be taken into consideration with the ordinary
concepts, domicile test, 183-day test and superannuation test2.
Varying nature of tax treatments and consequences for foreigners
In case a taxpayer in Australia is seen as a foreign resident then the only consideration for
the tax treatment needs to be depicted in terms of the taxes which are levied as per the ordinary
1 Miller, Angharad, and Lynne Oats. Principles of international taxation. Bloomsbury Publishing, 2016.
2 Altshuler, Rosanne, Stephen Shay, and Eric Toder. "Lessons the United States can learn from other countries’
territorial systems for taxing income of multinational corporations." (2015).

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TAXATION LAW
and statutory income which are based on the sources of income in Australia. This will not be the
case unless there is deemed assessable income present with the other sources of income. The
main questions for the sourcing of the income needs to be also followed with the anything which
has a real income source and hold a practical application. This is directly in relation to the case
of “Nathan v FCT (1918)”, the sources of rule are also based on the several types of other
aspects which are needed to be depicted in terms of the common laws and practices as per the
statutory provisions3.
The duties of the foreign residents are seen with lodgment of the tax return. Moreover,
the individuals are seen with the payment of the sources needed to be included for the Australian
residents which are needed to be considered for the various types of the sources of the tax
treatment. Some of the different types of spruces of the income pertaining to tax treatment are
considered with the royalties, unfranked dividends and interest. The treaties of the taxes
pertaining to the Australian residents are depicted as per overall impact on the individual as per
the prescribed foreign country’s tax slab4. It needs to be also seen that the various types of the
treaties for Australian pertaining to other countries needs to be updated overseas rates and also
address the residency actions pertaining Australian legislation and treatment of the tax as per tax
amount. It needs to be also understood that the owners of the Australian financial institutions will
be able to ensure status of the residency which needs to be deducted as per the correct amount of
taxation. The net impact for the same needs to be depicted as per the various types of the
considerations which are directly seen as per the actions of the Australia and foreign country in a
situation of discrepancy5.
3 Stewart, Miranda. "Redistribution between Rich and Poor Countries." (2018).
4 Burton, David R. "Tax Reform: Eliminating the Double Taxation of Corporate Income." (2017).
5 Cao, Liangyue, et al. "Understanding the economy-wide efficiency and incidence of major Australian
taxes." Canberra: Treasury working paper 2001 (2015).