Taxation Law : Assignment Help

Added on - 17 Feb 2021

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TAXATION LAW
Table of Contents..........................................................................................................................................................3INTRODUCTION...........................................................................................................................4QUESTION 1..................................................................................................................................4a) Constitutional basis of Australian taxation system................................................................4b) Role of courts, Parliament and ATO in developing taxation system......................................4QUESTION 2..................................................................................................................................5Double tax agreement in Australia.............................................................................................5QUESTION 3...................................................................................................................................5Part 1..............................................................................................................................................5a) The property owned by Indiana since November 1976..........................................................5b) The property owned by Indiana since November 1986..........................................................6Part 2...............................................................................................................................................6QUESTION 4...................................................................................................................................7a)Loan taken for acquiring land for the purpose of accommodation business – interest can beclaimed as deduction or not?.......................................................................................................7QUESTION 5...................................................................................................................................7a)Calculation of Net capital gain or loss.....................................................................................7QUESTION 6...................................................................................................................................7a)Sourcing two articles from Australian Financial Review........................................................7QUESTION 7...................................................................................................................................8a) Code of conduct of tax agents................................................................................................8CONCLUSION................................................................................................................................9
INTRODUCTIONTax law is that field of legal study which deals with the common, constitutional, statutory, tax treaties & conventions and regulatory rules that constitute the legislation for the taxation(Woellner, R & et.al., 2016). Taxation law involves understanding, executing and defending thepayment or non payment of taxes to government. The present report is about the constitutionalbasis of Australian taxation system, role of courts, parliament and ATO in developing taxationlaw. Further, report will show the obligations and professional responsibilities of tax agentsunder the law.QUESTION 1)aConstitutional basis of Australian taxation systemThere are different articles and provisions in the Australian Constitution from which theAustralian Taxation system finds its basis. Different sections of the constitution are described inbrief below:Section 51 (ii): This section mentions the area of commonwealth power to enact tax lawsbut it should not be such that discriminates between states or any part of states.Section 90: This section provides the exclusive powers to commonwealth to imposeduties of excise and customs.Section 114: The mentioned section states that commonwealth cannot levy tax on theproperty of state nor on states commonwealth property without the permission of eachother.Section 53: This section prohibits the Senate to amend or introduce any bill which isrelated to taxation, appropriation or revenues.Section 55: This section states that legislation that is concerned with imposing tax shalldeal only with the imposing tax and the other supposed provision in the taxationlegislation shall be inoperative (Sadiq, K. 2019).
)bRole of courts, Parliament and ATO in developing taxation systemThe segregation of powers in a democratic country is necessary for avoiding themaltreatment of power and to protect the freedom of citizens of country. This is the reason whydifferent levels are formed for effective legal system. These are Legislature, Judiciary, andExecutive.Legislatureof the country is concerned with forming of the laws for the nation. Everybill must be passed by the Parliament and must have assent of Queen to be termed as aenacted law.Executivelevel is responsible for implementing the law formed by the Parliament.ATOis the statutory body of Australia which is responsible for collection of revenue on thebehalf of the Australian government.Judiciary or courtsof the Australia is the institution that performs the duty ofinterpreting the enacted law (McBarnet, 2019).QUESTION 2Double tax agreement in AustraliaThe term double taxation means imposing tax on a person by two or more jurisdictionson the same declared income. In general, an Australian resident is liable to pay taxes on allworldwide income whereas a non Australian resident is liable only on those which has beengenerated in the Australia. However, to avoid this regime of double taxation, the country hasentered into Double Taxation Avoidance Agreements (DTAs) with more than 40 countries.As per the case study, the USmanufacturer's income generated in the Australiawill betaxableand will be liable to file a tax return. The manufacturer would be also be eligible forexemptions if Australia has entered into a double taxation treaty with US. Since there is a treatybetween US and Australia for avoiding double taxation, the US manufacturer will be liable topay taxes on lower rate and will be eligible for the credit for the taxes paid in foreign country.This has been provided in US- Australia convention where in the article 22 , it has been providedthat resident or citizen of us shall be allowed credit as to the amount paid to Australia in the formfor tax for avoiding the double taxation effect (double taxation taxes on income conventionbetween the united states of America and Australia,2018).
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