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Taxation Law Assignment Solution (Doc)

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Added on  2020-10-05

Taxation Law Assignment Solution (Doc)

   Added on 2020-10-05

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TAXATION LAW
Taxation Law Assignment Solution (Doc)_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3QUESTION 1...................................................................................................................................3Permanent Establishment............................................................................................................3Business profits of an enterprise incorporated in UK have been taxed in Australia...................4Contracts made by an individual agent has a permanent establishment.....................................4QUESTION 2...................................................................................................................................5Liability of Andrew to make taxation payments for his basketball skills...................................5Liability of Andrew to make taxable payments on the income generated through rental income.....................................................................................................................................................5QUESTION 3...................................................................................................................................5Analysing the case of Myer Emporium v FCT in demonstrating assessable income throughordinary income or capital gain...................................................................................................5QUESTION 4...................................................................................................................................6Ascertaining case scenario and analysing deduction available for interest paid, on a loanduring preparatory stage of entity...............................................................................................6Identifying the importance of incidental and relevant test..........................................................6Determining the deduction can be allowed over the interest paid on loan after stoppage ofbusiness activities........................................................................................................................7QUESTION 5...................................................................................................................................7Analysing the 3 different sources that will be an indicator of good tax.....................................7CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................9
Taxation Law Assignment Solution (Doc)_2
INTRODUCTIONLegislation imposed by various laws, acts, rules and regulations which are based on bringingadequate control over all legal requirements in economy. Taxation in Australia is being executedand administered by Australian Taxation Office (ATO) which has facilitated various guides anddetails with analyzing the assessable income. In present report discussion will be based onregulations incorporated by Australian legal authorities for giving the citizenship to individual orcorporation. Moreover, discussion will have been based on various cases and guidelines that willprovided to tax practitioners in analyzing their assessable income and suggesting exemption onwhich they could apply.QUESTION 1Permanent EstablishmentIt is the framework on which a person or a business unit gets established in Australia andcarries out their activities. In this, profit generated by the business who is resident in the countrywill have to make payment of taxes on income. Taxation will be levied on entity in theresidential country of another, as per the sources of income states in such locations (Edmonds,2018). There will be taxable payments incurred on the dividends, interest and royalty paid to orobtained through a different nation. However, considering the act ITAA, 1997 where section 6-5(2), (3) and section 6-10(4),(5) defines the process where, taxes will be payable on the income generated by a person orcorporation which is a residential in Australia. Similarly, the non- residents will make paymentsof tax only on an Australian sourced income and therefore it is charged at higher rates. Thus, inrelation with permanent residency of an individual and business than there will be 3 tests whichare incorporated with this term. Domicile test insists that person has taken birth in Australia or anorganization has originated the business in country (Residency Test, 2018). 183 days’ test comprises condition that a foreign person entity needs to complete their 183days in Australia, then the individual will be liable to take citizenship. Superannuation testcomprise fund which is generated by government and employer of an individual on the salariesawarded to people. Thus, if a person is liable to have superannuation on their salaries than theywill be treated as resident and bound to make payments of taxes on their generated income.
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