Taxation Law

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

1TAXATION LAW
Table of Contents
Answer to question 1:.................................................................................................................2
Answer to A:..........................................................................................................................2
Answer to B:..........................................................................................................................2
Answer to question 2:.................................................................................................................3
Answer to question 3:.................................................................................................................3
Part 1:.....................................................................................................................................3
Answer to A:..........................................................................................................................3
Answer to B:..........................................................................................................................4
Answer to Part 2:....................................................................................................................4
Answer to question 4:.................................................................................................................5
Answer to question 5:.................................................................................................................6
Answer to question 6:.................................................................................................................7
Article 1: ATO Closing gap on multinational Tax Avoidance:.............................................7
Article 2: Removal of franking credit inequitable: Inquiry...................................................8
Answer to question 7:.................................................................................................................9
References:...............................................................................................................................10

2TAXATION LAW
Answer to question 1:
Answer to A:
Australia is regarded as federation and legislative power is spread among the
commonwealth and states. “Section 51 (ii)” lay down the areas of commonwealth power. As
per “section 51 (ii)” it allows the commonwealth to make laws in relation to the taxation but
requires not to make discrimination between the states or parts of the states (Woellner et al.,
2016). The board of commonwealth has the power to impose tax that should be read as
subject to the beginning of “section 51” which lay down the right to make powers subject to
the constitutions. While “section 90” provides the Commonwealth with the exclusive powers
to impose tax on custom duties and excise.
Answer to B:
The development of Australian government tax policy and its application legislation
is the accountability of the Treasury Ministers. The ATO plays a vital role in the formulation
of policy and legislative procedure which reflects the inter-reliance of legislation, policy and
administrative aspects of taxation system (Barkoczy, 2016). The main function of ATO is to
manage tax and legislation of superannuation that are passed by the parliament. To perform
this, ATO develops the managerial arrangement to apply tax law, educating and advising
taxpayers regarding their rights and obligation.
While the role of High Court is to interpret and implement the taxation of Australia to
the decided cases that have special federal significances together with the challenges to
constitutional validity of laws and hearing appeals from the federal, state and territory courts.
The parliament comprises of lower houses and upper houses (Miller & Oats, 2016). Bills
should be passed through both the house of parliament. The lower house brings forward the
taxation bills to the parliament and the same is proceeds to upper house to pass the bill.

3TAXATION LAW
Answer to question 2:
According to the Double Taxation Agreement between Australia and US. the business
profits derived by the enterprise of one contracting states will be levied taxes only in that
state except the company is performing the business in the different contracting state with the
help of permanent establishment (Jones & Rhoades-Catanach, 2015). If the company is
carrying on the business as aforementioned, the profits derived by the business will be
taxable in the other state only to that extent which is attributable to the permanent
establishment. According to the “section 6-5, ITAA 1997” a resident taxpayer is required to
pay taxes on income from all the sources while “section 6-10, ITAA 1997” states that a non-
resident is required to pay taxes on the Australian sourced income (Gashenko et al., 2019).
A company is regarded as the Australian resident company if it is carrying the
business in Australia and has the central management as well as control in Australia. Usually,
business income is taxable where the transactions are performed. The court of law in “C of T
(NSW) v Hillsdon Watts Ltd (1937)” held that business income is usually where the business
was performed. In other words, it is the place where the contract is performed and forms the
only relevant factor in determining the source (Freudenberg et al., 2017). With reference to
the Double Taxation Agreement the profits from the Australian sales are sourced in Australia
by the US manufacturer. As a result, the profits will be taxable in Australia for the US based
manufacturer because it is sourced in Australia.
Answer to question 3:
Part 1:
Answer to A:
Capital gains is generally applied to the assets that are acquired or other events that
are happening on or following the 20th September 1985. Consequently, the word such as Pre-