Taxation Theory, Practice & Law

Taxation Theory,
Practice & Law

Table of Contents
QUESTION 1...................................................................................................................................1
Tac liability of Pablo in Australia on his salary...........................................................................1
QUESTION 2...................................................................................................................................1
The respective outcome reached by the courts in the case of Californian Copper Syndicate Ltd
V Harris........................................................................................................................................1
QUESTION 3...................................................................................................................................3
GST consequences of the arrangement for the companies..........................................................3
QUESTION 4...................................................................................................................................4
Calculation of the net payable tax by the Melbourne Awesome Ltd for the year ended 30th
June 2019.....................................................................................................................................4
QUESTION 5...................................................................................................................................4
Discussion of ATO's Test Case Litigation Program....................................................................4
QUESTION 6...................................................................................................................................5
Calculate the net income of the partnership.................................................................................5
Allocation of net income to each of the three partner..................................................................6
Discuss relevant legislation or case law.......................................................................................6

QUESTION 1
Tac liability of Pablo in Australia on his salary
Taxation is the total amount which is required to be paid by the individuals as well as
businesses on the income which is generated during the year. The legal authorities of the
countries are responsible for imposing the taxation rules on the entities and persons so that they
can pay the appropriate amount of tax on their income. If they will not be able to pay the
accurate value of taxation then it may result in punishment by law. Pablo is a Portuguese who
worked in Australia for one month and received salary fro the working. He was sent by the
company for this short period in Australia to the he can assist the project with establishment of a
branch office in the country. Salary of Pablo was credited in Portuguese bank account. During
the year total earning of Pablo was around 120000 Australian dollars. He will be responsible for
making payment of income tax on the Australian sourced income. According to the Australian
Taxation law, if a person is receiving salary for working within the country then the generated
income will be taxable within the nation. Apart from this, there is another rule related to interest,
unfranked dividend and royalty. According to this rule, these incomes will not be taxable in
Australian as these are already been taxed correctly within the country.
The taxation rate at which Pablo will be required to pay tax on the salary which was
generated by working in Australia will be 32.5%. It is the rate at which all the non-residents pay
tax in Australia on the income which is generated in Australia. It will be very important for Pablo
to pay tax on the non-resident withholding rats on the part of income which is generated in
Australia. For example, as total yearly income of Pablo is 120000 and if it will be divided in
months then for one month it will be (120000 / 12) 10000. So the taxable salary of Pablo in
Australia will be 10000. The amount of tax which will be required to be paid on this income will
be (10000 * 32.5%) 3250. It will be the total tax which tax which will be required to be paid by
Pablo on the salary. Rest of the salary will be taxable according to Portuguese taxation laws.
QUESTION 2
The respective outcome reached by the courts in the case of Californian Copper Syndicate Ltd V
Harris
The opinion which was provided by Lord Justioce Clerk uin the case of Californian
Copper Syndicate Ltd was that the principle in dealing with the questions in the assessment
1