Comprehensive Taxation Law Report: Case Analysis and Regulations

This report delves into the intricacies of taxation law, examining key aspects such as tax deductions, input tax credits, and relevant case studies. It begins by exploring the concept of taxable income and permissible expenses according to the Income Tax Assessment Act of 1997, including the deductibility of business expenses like machinery relocation and legal proceedings. The report then analyzes a case study involving a bank, focusing on the application of Goods and Service Tax (GST) input credit for advertising expenses, and provides a detailed breakdown of input tax credit calculations. Furthermore, it addresses the guidelines for compensation related to foreign tax, outlining the process and limitations. The report concludes with a comprehensive list of references, providing a solid foundation for understanding the complexities of taxation law and its practical applications.

Running head: TAXATION LAW
Taxation Law
University Name
Student Name
Authors’ Note

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TAXATION LAW
Table of Contents
Solution to Task Numbered 1:...................................................................................................2
Solution to task Numbered 2:.....................................................................................................3
Solution to Task Numbered 3:...................................................................................................5
Solution to Task Numbered 4:...................................................................................................8
References..................................................................................................................................9

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Solution to Task Numbered 1:
According to Taxation ruling mentioned under section 4-15 of the directive Income Tax
Assessment Act of the year 1997, taxable income can be estimated by proper subtraction of
permissible expends from the assessable income (Cao et al. 2015). In essence, individuals
making disbursements for tax can claim to get subtraction from the specific quantifiable
proceeds. Laws under Section 8-1(1) mentioned under ITAA declared during the year 1997
explain that an individual can ask for deductions for
- For the purpose of creation of quantifiable income
- For the purpose of carrying out business actions
Thorough analysis of the rulings on taxation helps in gaining understanding regarding the
following:
- As per the bylaws specified under the rule section 8-1 outlays carrying machinery
from one site to another can be considered for deduction only if the machinery is put
to use for generation of proceeds that can be taxed (Davis et al. 2015). The legal case
specified under the title “Granite Supply Association Ltd vKitton of 190” helps in
validating that corporations for particularly reposition of business’s plants need not be
allowed for subtraction as the outgoings are capital in make-up. In addition to this, the
consequences of the case on Smith v Westinghouse Brake Company of 1888 also helps
in substantiation of the same matter as mentioned by the case on Granite Supply
Association Ltd vKitton of 190.
- Taxation ruling under segment 8-1 under ITAA declared during the year 1997 states
that cost borne by the business for re-estimation of resources cannot be taken into
account as deductible expenditure (Kenny 2013).

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- According to Taxation ruling mentioned under sub-division of the rule 8(1) any type
of disbursements for official/lawful proceedings, that subsequently can resist the
liquidation of the firm can be considered as deductible pay out (Krever 2013)
- Taxation ruling pronouncement stated under the segment 8-1 articulates that business
spending carried out by legal representative for generating business earning can be
regarded as an acceptable subtraction (Milton 2013)
Solution to task Numbered 2:
Analysis of the case reveals that the corporation Big Bank Ltd functions through 50 branches
and has numerous call centres for support. Headquarter of the firm is situated in a 10 storied
building. It can be hereby ascertained that goods and service tax input credit is permissible if
the purchases made by a corporation associated to this type of business dealings are
appropriately preserved. Keeping in mind the directives as mentioned under the Goods and
Service Tax Act declared in the year 1999, it can be hereby asserted that business corporation
operating for generation of higher level of earnings have the ability to acquire input credit.
This is necessarily directed towards carrying out disbursements for goods and service tax
(GST) that acknowledged purchase of material or asset (Morgan et al. 2013).
Recognized Issue:
This is necessarily recorded for the purpose of implementation of goods and service tax.
Furthermore, evaluation of the case study reflects the fact that the business firm incurs
specific expense amount of $1650000. This amount expended for advertising of products is
inclusive of GST. Nevertheless, the bank intends to check whether the entire amount of
disburse for advertisement can be allowed as input credit since the expend counts the goods
as well as service tax (Parker 2015).

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Taxation Rules:
As per the decree asserted in the second section of the Goods and Service Tax declared in the
year 1999, business corporations can be permitted to obtain input tax credit of specifically
goods as well as service tax. This is particularly obtained on diverse kinds of expends of
business corporations all through normal business course of operations of the business
provided that expends are inclusive of GST (Pearce and Pinto 2015).
Specific application of the decree:
The business concerns in the case study talks about the fact that the business concern Big
Bank offers specialized financial services. This firm also holds in excess of 50 branches
throughout the nation. Latterly, Big Bank has started offering an insurance policy and home
content in the specific market addition to proviso of loans along with deposit service to all the
customers (Pearson 2017). Nevertheless, this bank has also adequately apportioned specific
amount for advertising different financial products as well as services associated to home and
home. However, out of this, approximately 2% of the overall revenue of the business concern
is designed and created (ROBIN 2017). By itself, the left over amount that is almost equal to
$1100000 is allocated for the purpose of carrying out advertisements that is aimed at
endorsing different financial products as well as services of the bank that counts GST.
Therefore, it can be hereby deciphered that the Big Bank has spent roughly $1100000 for
creating awareness about their financial products as well as services among people can be
permitted for acquirement of tax input credit. Defiantly, the entire amount equalling $550000
cannot particularly be permitted to obtain tax input acknowledgment because around 2% of
the overall firm’s expenditure does not contribute in the process of generation of earnings of
the entity (Saad 2014).

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Table 1: Representation of Input tax credit
(Source: As Created by Author)
Solution to Task Numbered 3:
Taxation ruling or else decree asserted under the directive sub-division 717 A speaks about
guideline associated to compensation for the income tax (Woellner 2013). Essentially, the
calculation can be presented in a tabular format given below:
Table 2: Representing Income Tax That Need to be Paid

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(Source: As created by Author)
Table 3: Representing Income Tax that need to be paid
(Source: Created by Author)
Table 4: Representing Income Tax that is Payable
(Source: As Created by Author)

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Necessarily, process of offsetting or else compensating for particularly foreign tax can be
undertaken by subtraction of the amount of tax that the person paying the tax disburses. This
is essentially enumerated by deduction of specific amount of earnings under initial choice
from payable tax amount from the second substitute (Woellner et al. 2016). As a
consequence, the edge can be computed to be ($11794.18-$6821.68=$4972.50). Nonetheless,
the offsetting else wise compensating foreign tax is necessarily above the total amount of tax
payment. Hence, the total limit for compensating or else balancing foreign tax necessarily
stands at $4400.

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Solution to Task Numbered 4:

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References
Cao, L., Hosking, A., Kouparitsas, M., Mullaly, D., Rimmer, X., Shi, Q., Stark, W. and
Wende, S., 2015. Understanding the economy-widze efficiency and incidence of major
Australian taxes. Treasury WP, 1.
Davis, A.K., Guenther, D.A., Krull, L.K. and Williams, B.M., 2015. Do socially responsible
firms pay more taxes?. The Accounting Review, 91(1), pp.47-68.
Kenny, P. 2013. Australian tax 2013. Chatswood, N.S.W.: LexisNexis Butterworths.
Krever, R. 2013. Australian taxation law cases 2013. Pyrmont, N.S.W.: Thomson Reuters.
Milton, 2013. The taxpayers' guide 2013 & 2014. Qld.: Wrightbooks.
Morgan, A., Mortimer, C. and Pinto, D. 2013. A practical introduction to Australian taxation
law. North Ryde [N.S.W.]: CCH Australia.
Parker, M., 2015. Division 7A and winding up structures. Taxation in Australia, 50(6), p.312.
Pearce, P., and Pinto, D. 2015. An evaluation of the case for a congestion tax in
Australia. The Tax Specialist, 18(4), 146-153.
Pearson, G. 2017. Further challenges for Australian consumer law. In Consumer Law and
Socioeconomic Development (pp. 287-305). Springer, Cham.
ROBIN, H., 2017. AUSTRALIAN TAXATION LAW 2017. OXFORD University Press.
Saad, N., 2014. Tax knowledge, tax complexity and tax compliance: Taxpayers’
view. Procedia-Social and Behavioral Sciences, 109, pp.1069-1075.
Woellner, R. 2013. Australian taxation law select 2013. North Ryde, N.S.W.: CCH Australia.

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Woellner, R., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D., 2016. Australian Taxation
Law 2016. OUP Catalogue.