Taxation: Theory, Practice & Law Report - Detailed Analysis

This report delves into the intricacies of taxation, covering various aspects of tax law and practice. It begins with an introduction to taxation and its legal framework, followed by detailed answers to specific questions. The report explores topics such as tax liabilities for individuals working abroad, the tax implications of property sales, the Goods and Services Tax (GST) and its application in business transactions, income tax calculations for companies, the Test Case Settlement Initiative, and the tax treatment of partnerships. It provides calculations, analyzes relevant legislation, and references key sources. The report aims to provide a comprehensive understanding of taxation principles and their practical application within the Australian context.

Taxation Theory, Practice
& Law

Table of Contents
INTRODUCTION...........................................................................................................................3
Questions.........................................................................................................................................3
1...................................................................................................................................................3
2...................................................................................................................................................4
3...................................................................................................................................................4
4...................................................................................................................................................5
5...................................................................................................................................................6
6...................................................................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Taxation is indeed a concept for whether a governing body levies or applies a tax, typically a
states. In other word, all forms of mandatory levies, from wages to capital gains to property
taxes, that expression is referred to 'taxation'. Law generally means a system of laws established
and applied to control conduct by social or legislative structures, with its exact meaning a subject
of long-standing debate. In this report, different question related with Tax, law and practices are
discussed.
Questions
1.
In the respective case, Pabola is liable to pay taxes only to the Portuguese government because,
he is living in Australia for a specific purpose which is permitted by company. He is not forced
by the Australia Tax department because, he have already registered in Portuguese tax
department as a regular tax payer on each and every income which he earn either in home
country or in any part of world. The revenue stream still relies on the facts. Typically, when
determining the origin of employment revenue, the position where even the work is practised is
very relevant. Other variables can, furthermore, be even more relevant in those situations. For
employment plans greater than 3 months, it is important to evaluate the situation to decide if the
position is related to Australia. It protects whether:
 Changes to the terms of service of the work arrangement
 Changes in the essence of the work
 They are going to work after an Australian corporation connected with your boss.
 The job 's economic effect or consequence moves to Australia
 The financial provider is now in Australia, the company under which you offer services
(see Taxation Regulation TR 2013/1)
 They deal for Australian consumers,
 The success of the project depends completely or greatly on the powerful proximity in
Australia to accomplish everything.
 Australia becomes the permanent working position
 Change in the purpose for Australia.

2.
In respective case of Californian Copper Syndicate Ltd v Harris situation, the key aim of a
corporation was to purchase land containing copper. The copper, though, was not ever removed.
The company eventually sold the property to some other corporation and obtained equity as
compensation within this company. The tribunal ruled that the selling of the property was gain in
essence so the purpose of the corporation would be to generate a money from selling of the
property throughout all times. The above was indeed a normal occurrence in the company and
profits in taxpayers in existence. Land tax is indeed an annual payment owed by developers to
the governments of the state and territories. If the corporation actually lives, then they would
possibly need to charge land value tax upon this. With the exception of the Northern Territories,
it exists anywhere. The rules are identical between countries and they do differ. In the
community of Fresno, region of California, throughout the United States of America, to obtain
copper as well as other mines, mineral rights, sulphide as well as auriferous property.
In California or somewhere in the u.s.a, as well as any value in it, or in general to retain the
factories identified as "M'Kinley," "Last Shot," "Heiskell," "M'Kinley Extension," and "Heiskell
Extension," located throughout the united states of America. With regard to mines, property
resources, minerals, properties, forestry, waterways, water resources, rivers including property of
almost any or other nature situated in any part of America or elsewhere; and also to obtain and
obtain complete or contingent compromises, rights and freedoms from any governing authorities,
rulers, regimes or states, or individuals or entities, or from any private or other agency, or from
any commercial or several other body. With such a view to the purchase of the previously stated
mines, the arrangement alluded to in article iii of the Terms of Incorporation of the Company
shall be accepted and carried into force, with so much (if any) amendments or amendments as
may be decided upon, but subject to alterations or amendments decided upon subsequent to the
legislative meeting, with the consent of such a conference, as well to explore as well as discover
for the intention of this meeting.
3.
The tax was implemented by the new administration and started on 1 July 2000, eliminating the
former federal commodity tax regime but was intended to cancel out a variety of existing rates,
penalties and sales taxes including its governor of the union and Region, such as bank rates and
taxation on stamps. Companies and other entities eligible with GST may usually:

 The amount they charge selling their products and services includes GST
 GST assert credits shown in the product price they procure for their organization.
A GST-registered undertaking shall owe GST mostly on eligible services it delivers to its clients,
but shall be entitled to a refund on every GST these have charged for the spending on those
goods and services and also for the purchasing of capital (receive and process tax credits). A
licenced undertaking shall lodge Economic Transaction Documents regularly (monthly, quarterly
or annual basis) and pay the overall number amount GST payable to the taxation office today
(when more GST is charged than received, the tax agency shall give a reimbursement instead).
GST is excluded for certain items & services (notably jobs, pensions, healthy produce and
real estate). Input tax is imposed for other goods and services (rental revenue and investment
banking), which ensures that GST is not imposed on the transaction, but GST collected for that
portion of the market is also not eligible for a tax deductions.
Question 3
Let’s take GST as 18% for all types of transactions;
Surfs Up P/L Dr. $192,104
To Billapong P/L $162,800
To GST@18% $ 29,304
(Being 370 surfboards sold @$440 each)
Billapong P/L Dr. $6,160
GST Dr. $1,109
To Surfs Up P/L $7,209
(Being 14 surfboards@$440 each returned)
Here, Billapro is doing B2B transactions; while Surfs Up P/L is into B2C business transactions.
GST is always applicable at the time of selling of item. Hence, in this case; Surfs Up is buyer
and Billapong is seller. Therefore, GST calculations have been shown for Billapong; while Surfs
Up will collect this GST while having transaction with end customers.
4.
The most important revenue source in the taxation system seems to be the income tax, which
comprised of 3 primary pillars:
Private income
Earnings for company

Income in resources
Income charge is applicable to the gross income of a person which is levied on all income
sources. This entails salaries from the work, corporation revenues and dividends on savings.
Profits may also be subject to income tax, like whether a property or bonds are sold.
Taxpayers having 2 or even more occupations or other forms of taxable revenue must be mindful
that, as a consequence including its interest exempt cap, they may be trapped in an accidental tax
trap. Australia's tax is levied on the gross income of individuals and businesses by the federal
government. Income tax rates have still not been levied by state legislatures. Income tax is paid
on people at high valuations, except at one of two rates for companies. The profits in associations
as well as trusts shall not be taxable individually, nor shall be assessed on the allocation thereof
to the members or receivers. The most substantial source for revenues and within Australian tax
regime is tax rate. The income money is levied also by Australian Taxing Service on behalf of
the government.
Net tax payable by Melbourne Awesome at the end of the year 30th June 2019 @30% will be:
Net Income from trading = $80,000
Add: Unranked distributions = $25,000
Add: Rental income = $ 5,500
Less: Business expenses = $55,000
Total Income = $55,500
Less: Income tax @ 30% = $16,650
Hence, net tax payable by Melbourne Awesome Ltd. is $16,650
5.
The Test Case Settlement Initiative provides consumers with financial support to support them
cover any, or all, of the appropriate ATO-law-related legal expenses that satisfy clear funding
requirements and goals.
In order for a case to receive funding approval, the issue must:
 These include problems in which there is confusion or debate over how well the
legislation functions
 To be tested in court in the interest of the public.

 Instability or dispute about what the rule works suggests that the legislation is vague or
there is dispute as to what the legislation entails and how it applies, with hardly any
judicial clarity on the subject. It should not contain contradictions that are strictly based
on issues of reality.
This suggests that a variety of taxpayers could be impacted, if there really are opinions from
business whether society that the situation is unclear or controversial.
By working with us to discourage delays, they must prove commitment to pursue the conflict in
a reasonable time. Until a proposal is received, any suggestion that it will not happen (based on
previous or present behaviour) would be regarded.
As a body of justice, the argument must've been responsible for having court framework,
deserving that's been used to determine other cases containing comparable evidence, providing
taxpayers confidence and clarification.
6.
(a) Net income for partnership-
Sales 187200
Expenses ($)
Cost of goods sold 130000
Interest on capital paid to Richard and Tracy 8000
Salary to Alice 25000
Superannuation to Alice 6000
Lease payments on car 5600
Other deductible operating expenses 10000
Net income ($) 2600
(b) Allocation of net income:
The allocation of net income will be done between two partners named as Richard and
Tracy. It is so because Alice is working on salary basis. As well as both partners equally
deposited amount of $40000. Thus, net income will be distributed that will be of $1300.
(c) Relevant legislation for above case.
Partnership Act 1895- With a view of profit, a partnership includes two or more parties
entering into company jointly. In Western Australia, the Partnership Act 1895 governs

partnerships. A partnership agreement is perhaps the most traditional type of partnership
joined into it by small businesses, where both partners engage to some degree in the day-
to-day managers of the company. As per Partnership Act 1895, it has some features like:
 A partner's portion of the company's tax losses, according to such provisions, can be
adjusted against such personal taxes.
 The partnership is comparatively quick to break.
 The partners are not workers. For partners, negative gearing benefits and workers '
compensation policies are not mandatory.
 It is easier to secure funding since you do not rely on the profits or properties of one
individual.
CONCLUSION
In the end off report, it has been concluded that tax system help an entire company to make
better revenue generation which is further used for updating overall economy. There have been
different laws and system which are imposed by the government of Australia on each and every
individual or partnership companies so that they are liable to pay taxes over the income earned
through any source.

REFERENCES
Books and Journals:
Armstrong, C. S., Blouin, J. L. and Larcker, D. F., 2012. The incentives for tax planning. Journal
of accounting and economics, 53(1-2), pp.391-411.
Staff, T. P. C., 2017. Distributional analysis of the conference agreement for the Tax Cuts and
Jobs Act. Washington, DC: Urban-Brookings Tax Policy Center, 2100.
Tax, N., Bockting, S. and Hiemstra, D., 2015. A cross-benchmark comparison of 87 learning to
rank methods. Information processing & management, 51(6), pp.757-772.
Tax, S. S., McCutcheon, D. and Wilkinson, I.F., 2013. The service delivery network (SDN) a
customer-centric perspective of the customer journey. Journal of Service
Research, 16(4), pp.454-470.
Online
Foreign income. 2020. [Online] Available Through:
<https://www.ato.gov.au/individuals/income-and-deductions/income-you-must-declare/foreign-
income/?=redirected_foreignincome>.