Taxation Theory, Practise and Law

Running head: TAXATION THEORY, PRACTISE AND LAW
Taxation theory, practise and law
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TAXATION THEORY, PRACTISE AND LAW
1
Table of Contents
Answer to Question 1: Advising The City Sky Co of the input tax credit entitlements. 2
Answer to Question 2:..................................................................................................3
1. Calculating the capital gain tax (CGT) consequences of Emma’s transactions in
2015:.............................................................................................................................3
2. Providing information regarding the legal issues and relevant taxation law:...........5
References and Bibliography:......................................................................................7

TAXATION THEORY, PRACTISE AND LAW
2
Answer to Question 1: Advising The City Sky Co of the input tax credit
entitlements
The GST consequence is mainly considered to be an essential form of tax law
that has been imposed by the Australian Tax Organisation (ATO) on the business
activities of organisations. The Goods and Service Taxes are mainly calculated for
detecting the level of taxes that is mainly imposed on the total transactions that have
been conducted within Australia. The tax measures that have been imposed by the
ATO also allows the dealers to claim relevant GST credit for their transactions, which
might eventually help in reducing their tax consequence. The GST Act that have
been imposed by the ATO mainly helps in determining the appropriate level of
actions that is conducted on certain scenarios and transactions (Cassidy 2017).
Therefore, The City Sky Co for claiming the relevant tax credit can eventually
utilising the GST Act and determine the appropriate level of benefits from their
transactions. The analysis has mainly indicated that City Sky Co is a registered
organisation and is eligible for availing input tax credit whenever it is applicable.
However, there are certain credit conditions that needs to be satisfied by the
organisation, which are depicted as follows.
1. Appropriate tax invoice needs to be maintained from the supplier for
appropriately detect he level of GST that have been paid on the purchase of
relevant goods. Therefore, the invoice should have a clear depiction of both
prices and GST imposed on the goods.
2. The dealers that is used for purchasing the selling purposes neds to be
registered under the provision of GST Act for claiming the overall GST credits.
3. Therefore, the transactions that is maintained by the purchaser needs to have
a GST inclusive amount, as it helps in claiming the tax input credit for the
transaction under the GST law.
4. Moreover, the GST regulations also indicate that the time limit for claiming the
input tax credit is at the levels of 4 years.
5. In addition, the organisation needs to submit relevant tax input credit to the
Australian Tax Office for obtaining the required level tax credit for the
organisation.
The analysis has been conducted on the overall case study of City Sky Co,
where the management aims in developing residential properties which will be sold
to relevant customers. In addition, the analysis has mainly stated that 15 residential
properties will be developed and sold to relevant customers. In addition, the services
of the local lawyer are also taken into consideration by the business. Furthermore,
the business of City Sky Co is mainly registered under the regulations of GST Act,
which enables the organisation to claim relevant GST credits on purchases of both
goods and services (Cassidy and Cheng 2017).
Therefore, from the relevant analysis of the services that have been obtained
by City Sky Co for relevantly completing their operations is mainly considered to be
under the GST credit scheme. The development services of $33,000 have been
taken by City Sky Co from a local lawyer, which is mainly considered to be under the
reverse charge mechanism. Therefore, it is detected that under the reverse charge
mechanism the GST needs to be paid by the receiver of the services. Hence, if the
receiver uses such services for its business purposes then for the tax purposes
relevant claims can be made under the input tax credit. City Sky Co is a
development company, where the services of the lawyer can be claimed, as the