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The Australian Taxation System

   

Added on  2021-06-17

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Running head: TAXATIONTAXATIONName of the Student:Name of the University:Author Note
The Australian Taxation System_1

TAXATION1Table of ContentsIntroduction......................................................................................................................................2Existing structure of the system:......................................................................................................3Advantages and disadvantage of the current system of taxation in Australia.................................6Conclusion:......................................................................................................................................8References........................................................................................................................................9
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TAXATION2IntroductionThe present report deals with the issue of the recent crackdown that has beenimplemented by the Australian Taxation Office. The crackdown has been done in respect of thededuction claimed by the business entities in respect of other work related expenses. The amountof deduction claimed by the business entities operating in the country amounted to $12 million inthe previous year (Mossialos et al., 2015). The Australian Taxation office brought the crackdown for the purpose of reducing the loss that is being borne by the exchequer in respect of thededuction that are claimed by the business houses in relation to other work related expenditure. Ithas been observed by the office that there has been an increase of around 20% in the amountclaimed as deduction. In addition to this, it has been noted by the Australian Taxation Office thatpeople are taking the maximum available amount available as the deduction irrespective of theactual expenditure that has been incurred by them (Farag et al., 2015). The maximum limit ofcertain expenditure such as motor vehicle use expenditure and laundry expenses have been madestandard amount that are being claimed as deduction. Hence, the present report will discuss whether the present system of Australian tax issuch that the entities are able to exploit it to get deduction they are not supposed to get. It is alsodetermined in the report whether the present taxation system is in dire need of reforms forchanging the present scenario of deduction.
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TAXATION3Existing structure of the system:It is essential to discuss the present system of the Australian taxation law in order tounderstand the present scenario prevalent in the country. The main characteristics of the taxationlaws of the country are as follows:a)All the costs that have been incurred to generate a particular source of income areallowed as deductions. It is also recognized by the system that various individual havingthe same kind of income may have to incur different sorts of expenses. b)For the purpose of deduction in case the individual is an employee, the statute has givenseveral deductions. They include expense related to travel, clothing and the expenses thatcan be attributed to educational purposes (Banks et al., 2015). c)It is clearly established in the framework of the law that for claiming deduction theassessee will have to display a direct connection between the source of income and theexpense that has been incurred for its generation. In addition to this, the expense shouldalso be not personal or private in nature. d)In other words, the provision of the Income tax assessment act 1977 a loss incurred orforegoing of income can be claimed as deduction if that leads to generation of a taxableand assessable income (Evensen et al., 2015).e)All the expenditure and loss can be claimed as deduction for carrying out a businessactivity. f)A loss or expense will not be deductible incase that is private in nature. g)If the expense incurred results in the generation of a non-taxable, non-assessable andexempt income, the same shall not be claimed as deduction by the assessee.
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