Taxation Law Assignment - Deductions, GST and Legal Expenses Analysis

This taxation law assignment analyzes several key issues related to allowable deductions under the Income Tax Assessment Act 1997 (ITAA 1997). The assignment addresses whether costs associated with moving machinery, revaluing assets for insurance, and various legal expenses are deductible. It also examines the application of Goods and Services Tax (GST) in relation to advertising expenditure by Big Bank Limited, determining the eligibility for input tax credits. The assignment provides legal analysis based on relevant sections of ITAA 1997 and GST rulings, supporting conclusions with legal references. The document offers a clear understanding of how different business expenses are treated for tax purposes.

Running head: TAXATION LAW
Taxation Law
Student Name
University Name

TAXATION LAW
Answer 1
Part 1
Issue
The main issue here is whether the cost incurred in case of a moving machinery will be an
allowable deduction or not as per “section 8-1 of ITAA 1997”
Law
“Section 8-1 of the Income Tax Assessment Act 1997”
Application
As per “Section 8-of ITAA 1997”, it can be inferred that the cost of moving machinery to a new
place will be considered as an allowable deduction for the purpose of depreciation. The moving
machinery has increased the cost of the asset and it should be allowable (Kabinga, 2015).
Conclusion
Therefore, it is concluded that the machinery will be treated as an allowable deduction.
Part 2
Issue
The main issue here is whether the cost incurred in case cost of revaluing assets to effect
insurance cover as per “section 8-1 of ITAA 1997”

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Law
“Section 8-1 of the Income Tax Assessment Act 1997”
Application
The cost of revaluing assets to effect insurance cover will be treated as allowable expense as per
“Section 8-1 of the Income Tax Assessment Act 1997” as the given expense is repetitive in nature
and it is beneficial for a temporary basis (Saad, 2014).
Conclusion
Therefore, it is concluded that cost of revaluing assets to effect insurance cover will be treated as
allowable expense as per ITAA, 1997.
Part 3
Issue
The main issue here is whether legal expense incurred by a company against a petition of
winding up as per “section 8-1 of ITAA 1997”
Law
“Section 8-1 of the Income Tax Assessment Act 1997”
Application
All the business organizations need to pay up their costs of their operational process. In the given
case, if any kind of legal expense is incurred by the company then it is not considered as any
form of allowable deduction as per “Section 8-1 of the Income Tax Assessment Act 1997”

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Conclusion
Therefore, it can be concluded that legal expenses incurred by the company cannot be considered
as allowable expense.
Part 4
Issue
The main issue here is whether the legal expenses incurred for the services of a solicitor as per
“section 8-1 of ITAA 1997”
Law
“Section 8-1 of ITAA 1997”
Application
In accordance to “section 8-1 of ITAA 1997”, it can be inferred that legal expenses incurred for
the services of a solicitor cannot be considered as any form of allowable deduction. According to
ITAA 1997”, those costs of business operations can be considered as allowing deductions which
are those which an individual produces the taxable proceeds (Snape & De Souza, 2016).
Conclusion
It can be concluded that the services of a solicitor cannot be considered as allowable deductions.
Question 2
Issue

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The current issue deals with reflecting the tax credit for Big Bank in accordance to advertising
expenditure.
Law
GST Act 1999
Application
The goods and service tax ruling provide an appropriate overview regarding
determination of input tax credit along with the respective administration of change. In
accordance to the given case study, it has been seen that the organization Big Bank Limited has
occurred an expense of $1,650,000 as GST. This expense was inclusive of their advertising
expenses. As per the given ruling, rules and regulations, GST is applicable for making any kind
of payment of taxable supplies. Due to this reason, it can be inferred that the given advertising
expense by Big Bank Limited was mainly for the purpose of creditable acquisition. Therefore,
as per GSTR ruling of 2006/3, Big Bank limited has gone way beyond their threshold limit and
thus they will be entitled for input tax credit for their respective GST supplies made (Barkoczy,
2016).
Conclusion
It can be inferred that Big Bank Ltd is very much entitled to claim their respective input tax
credit which is incurred in their respective advertising expenses.

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Answer to question 3:

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Answer to question 4:

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References
Barkoczy, S. (2016). Foundations of Taxation Law 2016. OUP Catalogue.
Christie, M. (2015). Principles of Taxation Law 2015.
Kabinga, M. (2015). Established principles of taxation. Tax justice & poverty.
Miller, A., & Oats, L. (2016). Principles of international taxation. Bloomsbury Publishing.
Pope, T. R., Rupert, T. J., & Anderson, K. E. (2016). Pearson's Federal Taxation 2017
Individuals. Pearson.
Saad, N. (2014). Tax knowledge, tax complexity and tax compliance: Taxpayers’
view. Procedia-Social and Behavioral Sciences, 109, 1069-1075.
Snape, J., & De Souza, J. (2016). Environmental taxation law: policy, contexts and practice.
Routledge.