Australian Taxation and Consumer Law

The provided text appears to be a solved assignment on taxation laws in Australia, covering topics such as income tax assessment, competition and consumer act, industry codes of conduct, price monitoring, and surveillance. The assignment references various Australian laws and acts, including the Income Tax Assessment Act 1936 and 1997, Competition and Consumer Act 2010, and others. It also mentions the Australian Taxation Office (ATO) and Pay as You Go taxation. The text includes a list of references to books and journals related to taxation and consumer law in Australia.

TAXATION LAW &
PRACTICE

Table of Contents
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
1. Primary sources of Commonwealth parliament’s taxation.....................................................1
2. Primary sources of tax law......................................................................................................1
3. Taxation ruling TR 98/17........................................................................................................1
4. Medical levy calculation.........................................................................................................2
5. Division of ITAA 1997...........................................................................................................2
6. Section 25-45 ITAA 97 specific deductions...........................................................................2
7. Significance of high court case law........................................................................................2
8. Three ways to value items.......................................................................................................3
9. Applicable rates for 45000 taxable income.............................................................................3
10. PAYG tax collection.............................................................................................................3
PART B 350.....................................................................................................................................3
PART C 350.....................................................................................................................................3
PART D 750....................................................................................................................................3
PART E 750.....................................................................................................................................3
CONCLUSION................................................................................................................................3

INTRODUCTION
Fair taxation and better ruling of the laws in a country is essential to maintain the regular
practice of the legislation imposed by the taxation office. Australia has the better taxation
strength so as to maintain the standard there must be better to know the fair taxation policies and
tax rates levied on the income slab or profit earnings by a person. Government can earn their
funds and make reserves for the expected future expenses so in context with that they impose
laws or taxation over citizens. In this, present report will provide deeper insight about ATO,
ITAA 36, ITAA 97, CCA and many related legislatives that are associated Australian taxation.
The acts and laws are developed and imposed by the federal legislative in Australia there are
several acts and laws regarding every issue in country. These helps in providing the fair
judgement regarding any case and every taxation benefits like deductions, allowance and
exemptions.
PART A
1. Primary sources of Commonwealth parliament’s taxation
The common wealth taxation is constituted in section 51 of constitution which describes
the power and legislation of this law except residual powers. It has originally starts from granting
the powers to states by federation in 1901. The commonwealth law has 39 subsections to 51
sections which describes the Head of power under which parliament has power and rights to
make the laws and regulations (James, Wallschutzky & Alley, 2013). There are several parts of
the commonwealth legislations which identifies the powers of this laws are Interest trade and
commerce power (ITCP) S51(i) which facilitates the trade and commerce between states and
other countries, section 51(xx), 51(xxix), and 51(ii).
2. Primary sources of tax law
The primary sources of federal law are the various codes like internal revenue, public
laws and income tax treaties etc. these sources acquires the highest authority (Gurran, Gilbert &
Phibbs, 2015). On the other side, IRS made the rules and regulation in writing these laws which
are known as treasury regulations. In context with supporting the code the IRS includes various
treasury decisions, revenue ruling (Parkinson, 2014). Technical advices, private latter, revenue
procedures etc. Which will facilitates the details in its published notices regarding the specific
taxpayers, court decisions and taxation related news.
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3. Taxation ruling TR 98/17
The ruling defines the resides in Australia which can be understand under subsection 6(1)
of ITAA1 1936 and 1997. The ITAA2 1997 act is consists of the 1936 act which defines the
Australian residents which is in context with the previous act (Hayward, 2014). The rulings are
based on the various individuals who enters in Australia such as:
 Tourists like during vacations of holidays
 Employees or workers on contract
 Students come to study and academic teaching in Australia
 Migrants from country
4. Medical levy calculation
Medicare levy can be measured as per the income gain by an individual which is 2 % of
their assessable income (Hattingh, Low & Forrester, 2013). For the person, who is benefited
with the private hospital medical and health insurance then concerned individual would not be
liable to make any surcharge over his income. These are the rebates which are collected and
contributed by government of Australia in context with providing the health and care premium
security to its citizens (Parkinson, 2014).
5. Division of ITAA 1997
Legislation such as ITAA 1997 can be applicable for the company who has found under
misleading and conducting deception about deducting cost of fine under various parts of the
CCA3 are mainly part IV4, IVB5, VIIA6 and XI7.
6. Section 25-45 ITAA 97 specific deductions
This section facilitates an individual in recovering the losses occurred due to theft, which
has provided deductions from the taxable income of person (Munshifwa & et. al., 2016). The
losses can be exempted regarding with money such as there is loss in the income year or if the
1 INCOME TAX ASSESSMENT ACT 1936
2 Income tax assessment act 1997
3 Competition and consumer act 2010
4 Anti-competitive practices
5 Industry code of conduct
6 Price monitoring and surveillance relating to industries or businesses
7 Application of ACL as commonwealth law
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losses due to theft, embezzlement, defalcation, misappropriation, stealing and larceny etc. these
can be deductible and the individual will be benefited with these kinds of deductions.
7. Significance of high court case law
The case of W Thomas & Co Pty Ltd v. federal commission of taxation 1965 related with
the deductions under repair and maintenance about new acquired premises (Magnusson, R.
2014). These helps in deduction over the repair and capital expenditure made by the tax payers.
The ruling includes:
 capital nature expenses made on repair.
 Renewal and reconstruction of newly acquired or purchased building.
 Issues when constructing under section 25-10 of ITAA 1997
 repairing the property which was previously used for non commercial or income earning
purpose.
8. Three ways to value items
For valuing the trading stock there can be there ways which can be use by the individual
in valuation which are as follows:
 Cost price method: This technique involves to the costs occurred on the stock in
bringing it to the current place and condition. These can be include prices such as
insurance, freight, excise duties, delivery charges and custom duties.
 Market selling value method: If the stock is being sold on its current value on normal
trading practices than this technique is used by tax payers.
 Replacement value method: Used on the last day of an income year as to obtain the
costs or expense of identified product in the market.
9. Applicable rates for 45000 taxable income
Tax payer is liable for the tax slab of 37000 to 80000 which is 32.5% and also with 3572
dollars to be added as the condition provided by ATO8 that, if amount exceeding 37000 than
there must be 3572 added before the taxable rate can be charges to income of the tax payer.
These includes the 2% temporary budget deficit levy and awarded with the not including the
Medicare levy. If the tax payer is resident in Australia than there can be addition of the
Medicare levy or if he has taken an insurance from the registered medical hospital than he will
not about to pay any Medicare levy, he only has to pay the budgeted temporary deficit.
8 Australian taxation office
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10. PAYG9 tax collection
Tax payer pays taxes on instalments, that it can be described as an individual earns by
employment or doing business, all the cash are deposited in their account and that will be easy
for government to make charges over their earning with effective or applicable rates over their
income (Ranjan, P. 2016). The taxpayer still has to pay the annual income return. The
digitalisation of taxation system helps the government in collection of taxes on the very prompt
way. The bank accounts of all the citizens contains all details regarding their salary, expenses,
name , address and other personal data which will help government in keeping all the records of
every individual or tax payer who is paying the taxes.
PART B
Ram was working in Australia as an tax agent he has made $1000 of payment as to fill
the previous year's income tax return. He also made payment to solicitor in regards with the 2
years ago objection on ATO assesment. In the current year he has paid the income tax of $50000.
Ram has made several transactions during this year. He has paid $1000 to his tax agents as to
make payments regarding the previous year income tax return and also made payments around
2000 about drafting an objection of ATO10 which was received by him before 2 years and has
spend 50000 for the income tax of the current year (James, Wallschutzky & Alley, 2013). He is
liable to make payment of the taxes of both the previous and current year that are exempted to
pay the 2 years ago draft to ATO because the draft is an deductible expenses which is return to
the two years before income tax paid by him. He did not made any payment previous year
regarding the income tax return so he has to make payments in this context. The taxes are to be
paid by Ram under various norms and regulation in federal legislation regarding income tax
assessment act. The tax can be charged over his income comes under the slab of 37000-80000
which has the rates of 32.5% over it (Cassidy & Cheng, 2017). The additional amount of 3572
can be paid by him as per the regulation is fixed over the ITAA 97 that if only $1 is more than
the 37000 than there can be added 3572 of amount into the final taxation payment made by the
tax payer. Ram can be benefited with the Medicare levy of 2% and budgeted 2% of temporary
deficit that is fixed in the income tax calculations by federal legislation and the various
legislative authorities in Australia.
9 Pay as you go
10 Australian taxation office
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PART C
Tina has landed in Australia for the main purpose of getting the education in a school at Bribane,
she has acquired visa on the basis of student and studies purpose and after completion of her time
period about graduation again return to her home. She worked in Australia at a super market as
to help herself in living and expenses at the completion of her graduation in which she has failed
the examination and assignments (Hayward, 2014). She has earned $12 thousand from her
employment in the supermarket. The cannot be treated as the residence of Australia (s 6(i)
ITAA11 36) as she has spend less time in Australia but she is liable to pay the taxation because
the income she has eared which is due to Australian sources. She has to pay taxes over it on the
rate discussed under ATO's income slab but she will not be benefited with the Medicare levy and
budgets temporary levy (Munshifwa & et. al., 2016). A part from it she can be denoted as
residential of Australia if she only came here for studies without including in any trade or
commerce like earning from these nation. As in this context she may be treated as the residential
in Australia (TR 98/1712). She was the temporary residential in Australia which can be come
under s995-1 (1) ITAA 199713.
PART D
Jimmy is an Australian university student he has been working in an restaurant and gain
the earnings of $27000, has also receives the tips from consumers around $750. during the time
of Christmas he has received the gifts from one of consumer of restaurant is the bottle of scotch
which is around $250 of the cost. During same festive event he receive $15000 as gift friom his
parents. In every month in restaurant the employer took all employees for a dinner and the
jimmy's cost for the dinner is around $845
INCOME STATEMENT
PARTICULARS AMOUNT
Earnings from restaurant 27000
Add: Tips from consumers 750
11 Income tax assessment act 1936
12 Taxation ruling
13 Income tax assessment act 1997
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dinner from employer 845
Gifts from parents 15000
Total income 43595
Deduction:
gift from consumers 250
Total deduction 250
Net income before tax 43345
less: income tax 14087.13
net income after tax 29257.88
Net income 29257.88
Add: Medicare levy 2% 585.16
Total net income 29843.04
Interpretation: It is to be interpreted that Jimmy has been working in the restaurant and
has gain the income of 27000. he earns the allowable like earnings like tips from consumers
(750) and monthly had dinner with his employer which is charged 845. Jimmy's parents has
gifted him $ 15000 on the event of Christmas which is counted in taxable income because of the
gifts and grand can only be exempted as if it comes under limit of $5000 (Cassidy & Cheng,
2017). he also got gift from one of the consumer of restaurant a bottle of scotch on the occasion
of Christmas which worth $250, as this gift comes under the deduction limit so he can claim the
amount (Ranjan, P. 2016). After adding all the earning and deduction the allowable deductions
Jimmy has the net income around 43345 which comes under the income slab of 37000-80000
and the tax to be rated at 32.5% which brings the final balance of Jimmy is 29257.88. Jimmy is
the resident of Australia so he will be benefited with the Medicare levy of 2% which is 585.16
the total income of Jimmy is 29843.04.
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PART E
Josie is a mortgage broker she facilitates loans to consumers from banks and earn
commission in consideration. She usually deals with her clients from her home and has used 15%
of her property and do her office operations over there (Cassidy & Cheng, 2017). She has various
expenses regarding her work place with the maximum of expense are done fro the office use. Her
expense includes council rate of $4,900, as per the ITAA 36 (8(1), 8 (2)) there are the
information provided for the general or specific deductions to be awarded on such expenses like
council rate are to be allowed for $2000 as annual deduction but here her expense are excessing
the limits of exemption so she has to pay the taxes over remaining balance after deduction 2000
from the council rates that is 2900 (Gurran, Gilbert & Phibbs, 2015). Half of the amount of
interest over her home loan to be marked as taxable and she has to make tax payments for the
remaining half amount that means 50% of 18900 has to be deducted from the expenses and
remaining amount must be paid by her that is 9450.
Other expenses made by her that should be deductible per the norms set by ITAA 36
under section (8(1) & 8(2)) which represents that the electricity and heating expenses can be
deductible at 45% of the value that is 3060 and the remaining amount has to be paid by Josie.
Further more the expenses done on her personal preference relating with the cleaning staff at her
property the whole amount of expenses are taxable and here she has to make payments for than
because appointing a cleaning staff is the personal choice as the place or property is also used for
her residence than it cannot be exempted (Min & LV, 2017). The telephone expenses made by
her in respect with home and mobile expense. She uses home telephone for 60% time business
uses and so as with 90% of the mobile telephone to be used by her for office purpose
(Munshifwa & et. al., 2016). The expenses can be made in respect of home telephone for office
use is 1620 and mobile expenses are to be 6480. Home telephone expenses can be exempted as it
comes under the limit of 5000 but mobile telephone expenses are excessing the expenses from
the exemption limit. The taxes has to be made by her on the mobile bills.
CONCLUSION
From the above report, it has been articulated that taxation imposed over the various
transactions in all the categories of income earnings. Australian government has made tax rate
slab as per the income earning of the citizens. It can be beneficial in earning the favourable
amount from individuals as per their earning made throughout the financial year. Besides this, it
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can be inferred that there are various grants and deductions allowed to them on the basis of limits
setting down by Australian government under ATO and various federal legislative laws or acts.
Further, it can be said that there are several laws related with income tax and consumer wealth,
which are providing the adequate knowledge to the tax payers about their taxable incomes.
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REFERENCES
Books and Journals
Cassidy, J., & Cheng, A. (2017, January). Legislative Responses to GST Tax Avoidance in
Australia and New Zealand: Lessons for China?. In 2017 International Conference of
Chinese Tax and Policy: The Function of Tax in the New Wave of Economic Development
in China.
Gurran, N., Gilbert, C., & Phibbs, P. (2015). Sustainable development control? Zoning and land
use regulations for urban form, biodiversity conservation and green design in Australia.
Journal of Environmental Planning and Management. 58(11),.1877-1902.
Hattingh, L., Low, J. S., & Forrester, K. (2013). Australian pharmacy law and practice. Elsevier
Health Sciences.
Hayward, R. (Ed.). (2014). Valuation: principles into practice. Taylor & Francis.
James, S., Wallschutzky, I., & Alley, C. (2013). The Henry Report and the taxation of work
related expenses: Principles versus practice.
Magnusson, R. (2014). The role of the law in promoting sexual health in Australia. Sexual
health: a multidisciplinary approach. 380-407.
Min, S. H. E. N., & LV, L. Q. (2017). English-Chinese Translation for Tax Vocabularies in
Business English. DEStech Transactions on Social Science, Education and Human Science,
(meit).
Mitchell, R. & et.al., (2016). Law, corporate governance and partnerships at work: a study of
australian regulatory style and business practice. Routledge.
Munshifwa, E. K. & et.al., (2016). Variances in rateable values in rating practice in Zambia: the
role of mental models in value assessment. Pacific Rim Property Research Journal. 22(2).
181-201.
Parkinson, M. (2014, July). Challenges and opportunities for Australia over the next decade. In
Speech to the Association of Mining and Exploration Companies Convention, Perth (Vol.
2).
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