Analysis of Australian Income Tax: Case Studies and Calculations

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TAXATION LAW
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Table of Contents
Introduction....................................................................................................................................3
Question 1.......................................................................................................................................4
Question 2.......................................................................................................................................5
Question 3.......................................................................................................................................6
Conclusion......................................................................................................................................7
References.......................................................................................................................................8
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Introduction
The details consists are in relation with the taxation system of Australia, the provisions consists
are in relation with the rules and regulation system as per the perspective of provided country.
All the aspects herewith consist of provision of income tax and taxation system as per the
relevant factors and consider covering the defined consistent targets.
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Question 1
Computation of income tax of the following persons for the year ended 30 June 2018.
(1). As the details refer herewith consists of income less than $18200 and does not have any
other additional income and thus the individual is not cover under the tax liability and not require
to pay any tax liability. Since no tax liability, no Medicare levies.
(2). Australian resident whose income consists of $32000, not be liable to pay any tax up to the
taxable amount of $18200. As the tax limit is up to $18200 and therefore tax liability arises over
the amount $18200 and the liability refer to be .19$ on the balance amount which consider to be
$2622.
(3). An Australian individual being a resident of the respective country having a taxable income
of $155000 and does not holds any private health insurance through the year. The income tax
liability refer to be 19822+ [.37*(155000-87000)] and therefore tax payable consists to be
$44982. The Medicare levy to be levied on the taxable income 2% and therefore chargeability to
be $3100.
(4). Australian company considered as ‘small business entity’ consists of income $100 and the
chargeability of tax likely to be @27.5% and thus the tax liability require being paid $27.5.
(5). Australian individual being a non-resident need not require paying the liability of Medicare
levy as the levy not applicable in case of non-residents. Thus the income tax liability require to
be paid by the non-resident consider to be $62685+.45*(255000-180000). So the net tax liability
requires being paid $96435.
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Question 2
PARTICULARS AMOUNT
Computation of Net Income Tax Payable/refundable Amount(in $)
salary income $32,000.00
Bank interest $150.00
Less :- Deductions to be allowed $450.00
Total Income for consider Tax $31,700.00
Total Tax require to be Payable on amount $31700 $2,565.00
Less:- PAYG Deducted $2,600.00
Income Tax require to be Refunded to Jeremy $35.00
Tax Deducted by the employer as PAYG deduction require to be refunded as the tax liability less
than the tax deducted by the employer and thus needed to be refunded. Bank interest is to be
consider for tax liability as per the income status of assesse and thus to be included for tax
purpose.
Deductions require to be reduce from the gross income of assess and the liability to calculated
accordingly and calculation are consider on the balanced income for tax purpose.
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Question 3
PARTICULARS Amount(in $)
Calculation of Taxable income for Rafael:- Amount
Total salary of Rafael 68,000.00
Fully franked dividend 2,000.00
Franking credit [$2000 *(30/70)] 857.00
Unfranked dividend 1,000.00
Franked (60%) dividend 900.00
Franking credit covers [$900*60%*(30/70) 231.00
Total Taxable income (Round off) 72,988.00
Total Tax to be payable:-
Calculation of Tax on $72988 15,268.10
Medicare levy to be consider ($72988*2%) 1,459.76
Total Tax 16,727.86
Less:- Franking Tax offset 1,088.00
Net amount of Tax to be payable 15,640.00
Less:-PAYG Tax Withheld by employer 15,100.00
Net balance of Tax to be payable (rounded off) 540.00
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Conclusion
The details consider to provide the taxation liability of various assess and consists to provide the
net liability to provide the effect over the income of assesse and thus the rules and regulation are
consider accordingly and the effects are provided over the necessary aspects of coverage. The
provision consists to reflect by provide the rules and regulation as per the Australian regulation.
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References
 Ato.gov.au. 2019. Individual Income Tax Rates. [online] Available at:
<https://www.ato.gov.au/Rates/Individual-income-tax-rates/> [Accessed 22 January 2019].
 Freebairn, J., 2015. Who Pays the Australian Corporate Income Tax? Australian Economic
Review, 48(4), pp.357-368.
 Passant, J., 2013. Income Tax in Australia: From Appearance to Reality. SSRN Electronic
Journal.
 Legislation.gov.au. 2019. Federal Register of Legislation - Australian Government. [online]
Available at: <https://www.legislation.gov.au/Series/F1997B02703> [Accessed 24 January
2019].
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