With the help of the given case study one would understand the taxability of income for musicians. There are several cases held regarding the taxability of income for musicians, since there was no separate law for them. Hence in early 1980s Australia Taxation office had introduced certain provisions regarding the income for musicians. The provisions directly points out the income needs to be taxed and the income which needs to be exempt. It also highlights the expenses, which are spent for organizing live shows and how such expenses should be dealt while computing the income for a musician. The description of the given case study is given below in detail.
This case study is about a guitarist named as Peter who is a member of a band. Two of the members were not an Australian citizen while the other two were the residents of Australia. Peter was from Australia. The band didn’t have much success in Australia so they have planned to move to Britain to taste some better success. They have got some success in Britain, so they decided to move to Britain until their album is a much bigger success. Their return to Australia would be after the wider success, which they will gain outside Australia. Now while doing live performances and selling their album CDs they have earned certain incomes, which is discussed below in detail. But since we need to discuss only from Peter’s point of view, only Peter’s income is discussed below:
To pay for the expenses and airfare Peter had sold his car for $60,000, which was purchased in 2010 for $95,000. This income would be considered under Capital Gain and capital gain tax would be charged on it and would be taxable in 2016.
To bare more expenses had also sold his shares for $11,000, which he had bought it in 2011 for $5,000. Even in this case Capital gain tax needs to be charged on it.
Their musical band had won ARIA award in Australia for best album in the year 2015. Each member had earned $20,000. This income should be taxable as other income.
Till the time their band left for Britain, they were performing live shows in Australia for which each band member had received $140,000 from July 2015 till 20th January 2016. This is their primary income and needs to be taxed as well.
The musical band had done a concert in Britain for which each band member had received $150,000. This income also needs to be taxable. Their band was a success in Britain.
They had released an album in September 2016, which was successful. It was well sold in Britain, parts of Europe and parts of America and Australia as well. Due to good sales each band member had also received $30,000 as royalties. This income needs to be taxed s royalty income earned.
Again in December 2016 band have won ARIA award in Australia for which each member had earned $10,000. This also needs to be taxed.
The band continued to receive royalties in the year 2017 for the newest album. Amount received by each member was $15,000.
In 2017 their album was awarded with best album of the year award by British Music Association. Each band member had received $16,000 from the association.
To know whether all the above-mentioned incomes are taxable or not, one needs to understand the provisions of assessable incomes in Australia.
As per Australian taxation law capital gain or loss on an asset is the difference between the purchase price of the asset and the money, which was received when it is disposed. Most of the personal assets are exempt from capital gain tax like home, car, furniture etc. A motorcar, which can carry a load of less than one tonne or fewer than nine passengers are exempt from capital gain tax.
When shares are sold then it would also attract capital gain tax. Shares are not exempted like cars. Capital gain tax needs to be charged on the profit earned by selling shares.
The ATO office has made separate guidelines for musicians and other live performers. Musicians and other live performers do not have fixed income, their income may be very high or may be very low as well. Incomes which needs to be taxed under Australian income tax are:
All the expenses, which are related to the business of the band, should be deductible under the Australian tax system. But these expenses should be directly related to the income, which needs to be taxed. If the income were not directly related then expenses would not be deducted.
Now, every income will be discussed in detail with the provisions mentioned above that whether the income would be taxed or not. The discussion of every income is given below in detail:
Conclusion:
All the provisions in link with the case study have been discussed above and now we need to compute the total amount which needs to be taxed in the year 2016, 2016 and 2017 needs to be computed.
The amount, which needs to be taxed in 2015, would be:
Total amount assessable in 2015 would be $160,000
The amount, which needs to be taxed in 2016, would be
Total amount assessable in 2016 would be $193,452
The amount, which needs to be taxed in 2017, would be:
Total amount assessable in 2017 would be $31,000
Total assessable income for Peter would come to Year 2015 + Year 2016 + Year 2017
= $160,000 + $193,452 + $31,000
= $384,452
References
Aria Awards – Home (2017) Ariaawards.com.au <https://www.ariaawards.com.au/>
Austlii: Austlii Databases (2017) Austlii.edu.au <https://www.austlii.edu.au/databases.html>
Barnet Jade – Find Recent Australian Legal Decisions, Judgments, Case Summaries For Legal Professionals (Judgments And Decisions Enhanced) (2017) Jade.io <https://jade.io/j/?a=outline&id=65266>.
Dreyfus, Kay, “Breaching The Profession: The Musicians’ Union Of Australia, Immigrant Musicians And The Post-World War II Australian Music Industry” (2012) 34 Musicology Australia
Freebairn, John, “Who Pays The Australian Corporate Income Tax?” (2015) 48 Australian Economic Review
Horvath, James L and David Wallen Chodikoff, Taxation & Valuation Of Technology (Irwin Law, 1st ed, 2008)
Performing Artists 2016 (2017) Ato.gov.au <https://www.ato.gov.au/Individuals/Tax-return/2016/In-detail/Publications/Performing-artists-2016/>.
Reporting Your Foreign Employment Income (2017) Ato.gov.au <https://www.ato.gov.au/individuals/international-tax-for-individuals/going-overseas/working-overseas/reporting-your-foreign-employment-income/>
South Australia V Totani (2017) Eresources.hcourt.gov.au <https://eresources.hcourt.gov.au/showCase/2010/HCA/39>
Working Out Your Capital Gain (2017) Ato.gov.au <https://www.ato.gov.au/General/Capital-gains-tax/Working-out-your-capital-gain-or-loss/Working-out-your-capital-gain/>.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download