Report on Taxation Principles
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Added on 2020-06-04
Report on Taxation Principles
Added on 2020-06-04
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TAXATION PRINCIPLES
Table of ContentsINTRODUCTION...........................................................................................................................1QUESTION 1...................................................................................................................................11. Residential status of Daniel as resident or non resident for tax purpose............................12. Calculation tax payable for Daniel.....................................................................................33. Discussion over Daniel's tax consequences in 2017/18.....................................................4QUESTION 2...................................................................................................................................5A.............................................................................................................................................51. Analysing the tax implication of FBT or Income tax....................................................52.Calculation FBT liability for Joyce................................................................................7B.............................................................................................................................................71.Advising Escape Vacations over tax implication...........................................................72.Calculating tax liabilities for Escape Vacations.............................................................73.Advising Escape Vacations to reduce the tax liability...................................................8CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9
INTRODUCTIONTaxation proceeds as to make fruitful legislation over income or revenue generated byindividual as well as corporations. Taxes are in force by ATO and federal register of legislationwhich contains various sections, laws, acts as well as legislation to make the fair taxation incountry. In the present report, Daniel and Joyce are the two individuals who are earning throughAustralian sources as well as they are also making payments of taxes over their income.However, with the help of various deductions or exemptions they will be liable to claim severalincomes or expenses. There has been calculations for FBT and tax liabilities as well as allowablereductionsQUESTION 11. Residential status of Daniel as resident or non resident for tax purposeDaniel is a Malaysian resident and moved America for work purpose in the Miningcapital corporation (Vann, 2016). He than moved to Australia for working in franchisee of thesame organisation on 1st November 2016. As per the Australian legislation authorities, for beinga resident in Australia one has to pass the several tests such as:Domicile test: Under this test an individual should have taken birth in Australia and musthave acquired the permanent residency (Miller and Oats, 2016). As per the scenario, Daniel is aMalaysian resident and has the native home there so, I this case he is denoted as the non-residentin Australia and would not be liable to make payment of taxes.183 Days test: As per conditions contained it this test is that, an individual must havestayed for more than or equal to 183 days in Australia. The persona must have completed 183days in Australian territory may be in alteration or frequent visits within the assessable year(Tran, 2015). Daniel will be eligible for making the tax payments as he has acquired joinedAustralian company in 1st November 2016, which is taxable year of 1st July 2016 to 30th June2017. He has passed the conditions implicated in this test and will be liable to make payments fortaxes.Superannuation test: In this test, ATO1 has made the condition that if a person isemployed in Australia and has the superannuation benefits from Australian government will beliable to pay tax (Pearce, 2014). Daniel has employment in American originated company's1Australian Taxation Office1
franchisee in Australia. This firm has made the annual payment of 250000 of salary withsuperannuation benefits to him. In this case can claim deductions over superannuation but he isalso liable to make tax payments.TR 98/17: As per this taxation ruling, an individual can acquired residential status inAustralia on the basis of several terms like:The individual should be migrant from Australia, as he has taken birth in the nationalterritory and living outside the country (Kreiser and et al., 2014).Students acquiring visa for studying in Australian university, schools or colleges.Teaching such as professor or lecturer like guest faculty in any educational institutionwere also denoted as the Australian resident.Tourists or the temporary visitors in Australia, they are also known as the residents.A person is employed in any Australian company on the basis of contract will also bedenoted as the resident for tax purposes.On the basis of above condition in TR 98/17, Daniel comes under condition ofemployment in Australia. As per norms set by ATO he can be denoted as the Australian residentand is liable to make payments of tax over his assessable income.Section (6)2: This section is related with the conditions and various legislation overassessable income of residents or visitors in Australia. It will be fruitful in understanding theterms and conditions for acquiring the residential stratus in Australia. Daniel has been employedin ans Australian firm as well as generating income from there, so he will be liable to make thetax payments (Dumiter and et.al., 2016). He has generated income through Australian sources aswell as from his rented property at Malaysia which has deposition of payments in Australianbank. Daniel; is also receiving the annual interests from both the banks and has income throughdividends or incentives, so he is liable to make payments for the taxes over his generated income.As per above mentioned various terms, laws, sections or ruling awarded by ATO incontext with residential status of Daniel, he can be denoted as resident in some terms as well asnon resident. As per residential test he has fulfilled the conditions of two aspects such as 183days test and superannuation. Where he has denoted as an Australian resident for making the tax2Income tax assessment act, 19362
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