Financial Reports Of Listed Companies In Australia

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
Course ID

TAXATION LAW1
Table of Contents
Answer to question 1:.................................................................................................................2
Answer to question 2:.................................................................................................................4
References:.................................................................................................................................9

TAXATION LAW2
Answer to question 1:
Issues:
Will the taxpayer be permitted to claim the input tax credit from the creditable
purchase under “subsection 29-10 (1) of the GSTR 1999”?
Rule:
The “GSTR Ruling of 2000/28” is mainly dealing with the attribution of the Goods
and Service Tax (GST) payable or the input tax credit under the “Goods and Service Tax Act
1999” originating from the sale of land under the standard agreement of the land (McCluskey
and Franzsen 2017). Attribution refers to the term that is used under the GST law for
describing the manner in which the account for the GST is payable on the assessable supplies
and tax credit for the creditable purchase. A taxpayer attributes all the input tax credit for the
creditable acquisition to the previous tax years where they deliver any kind of consideration
or the invoice that is issued relating to the purchase (Li and Stathis 2017). If the taxpayer
maintains his books for GST on the cash basis, the taxpayer attributes the GST payable on the
taxable supply for the tax year in which the considerations for the supply is obtained but only
up to the extent that the consideration is received during the tax period.
A taxpayer attributes the input tax credit to the tax year where the taxpayer provides
the consideration for the acquisition but only up to the degree that the taxpayer provided the
consideration during that tax period. Importantly, under the “subsection 29-10 (1)” the
taxpayers are allowed to claim the tax credit relating to the creditable transaction under the
standard contract of land that is attributable to the period of tax in which the taxpayers deliver
any kind of consideration for the purchase (Thuronyi and Brooks 2016). “Subsection 29-10”
also states that a taxpayer is permitted to claim the tax credit for the creditable transaction if

TAXATION LAW3
prior to they provide any form of consideration or issues the invoice associated to the
acquisition.
The taxpayers should denote that the tax treatment relating to the land and the
proceeds that are obtained from the sale of land is usually reliant on whether it is treated as
the capital asset or regarded as the subject of business or the commercial transaction
(Mangioni 2015). For CGT purpose, vacant land is usually viewed as the capital asset that are
subjected to the CGT. Nevertheless, if the land is transaction and it is undertaken as the part
of the business activity, the sales proceeds may be treated as the ordinary earnings and may
attract GST.
Application:
The case study highlights that City Sky Co is the property investment company that
has recently bought a vacant piece of land for the purpose of building 15 apartments to sell.
The company also engaged in the service of local lawyer Maurice Blackburn for providing
the legal services needed for the development and paid $33,000 for the service. The land
bought by City Sky Co will be considered as the subject of business or commercial
transaction. The land transaction undertaken by the City Sky Co as the part of business
activity and any sales proceeds will be viewed as the ordinary returns for the company and
will be subjected to GST.
City Sky Co with respect to the “subsection 29-10 (1) of the GSTR 1999” will be
attributable for the tax credit for the current tax year since the transaction of purchase was
entered into by the company in consideration for the acquisition (McCluskey 2018).
However, City Sky Co will only be allowed to obtain the tax credit up to the extent of
consideration delivered by the company for the present tax period.