Taxation Theory, Practice and Law

Taxation Theory, Practice
and Law

Table of Contents
INTRODUCTION...........................................................................................................................3
QUESTION 1 Calculation of net income of partnership firm.........................................................3
QUESTION 2 Fringe Benefits Tax Consequences of John's Remuneration Package By its
Employer..........................................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The taxation law means the law focuses on an link and association between the country
and its citizen. The taxation law contains all the laws which are directed by the government
authorities of the country for ascertaining tax payable and order of payment of tax. Taxation law
covers rules, regulations, policies etc. which governs the taxation system of the country
involving the charge on estates, transaction, income, property, licenses and more by government.
The given project contains two questions which are concerned with the taxation of Australia.
First question contains the calculation of net income of Daniel and Olivia Smith for the year
ended 30th June, 2017 for operation of their business called Brekkie and Lunch and OZ Bottle
Shop at 50 York Street Sydney as a partnership firm. Second question involve the Fringe
Benefits Tax laws for the employer of John. John is a senior executive at printing company who
receives child's school fees for private school for his children, accommodation service along with
remuneration package received by John.
QUESTION 1 Calculation of net income of partnership firm
In the calculation of net income for the partnership firm of Daniel and Olivia Smith, for
businesses of Brekkie and Lunch and OZ Bottle Shop, profit and loss account with trading
account is prepared and the net income is ascertained for the year ending 31st June, 2017 and this
trading and profit and loss account is created as per the taxation laws applicable them so that tax
can be calculated as per the Australian income tax law. The Trading and P&L A/c for their
partnership firm are as follows:
Trading and P & L A/c for partnership firm for the year ended 30th June, 2017
Particulars Amount (AUS $) Particulars Amount (AUS $)
To Opening Stock 9120
By Sales A/c ( Working
Note 1) 182055
To Purchase ( Working Note 2) 160343
To Gross Profit (c/f) 22342 By Closing Stock 9750
Total 191805 Total 191805
To Car Expense A/c ( Working
Note 3) By Gross Profit (b/f) 22342
VAN car 1260 * 90% =
2