Taxation Law For Various Corporate Community

Taxation Law : Various Corporate Community

Overview of Australian Taxation Office

Describe about the Taxation Law for Various Corporate Community.

1. The commissioner of taxation is Chris Jordan and also registrar of Australian business register. Chris Jordan is supported by Executive Committee and other various corporate committees. The Australian Taxation Office is led by commissioner of taxation, Chris Jordan (Deutsch, 2013).   

2. The mission statement of Australian Taxation office is to contribute to economic development and social wellbeing of the Australians by encouraging willing participation in tax and also in superannuation systems (Amatucci et al., 2006).

3. The information can be found on the official page of Australia Taxation Office. The web address of Australian Taxation office is https://www.ato.gov.au/. Australian Taxation Office is responsible for the development and implementation of taxation system within the country (Avi-Yonah, 2007). It effectively shape and manage the superannuation and tax system that fund services and support for Australians.   

4. The Taxpayer’s charter does not allow the Australian Taxation Office to disclose any information to other parties. The information can be disclosed by Australian Taxation Office when an individual wants for any specific reason.

5. The section 995.1 of Income Tax Assessment Act 1997 contains the definitions related to the act. It describes all the rules, policies and tax legislation (Boxer, 2008).

6. The Income Tax assessment act 1997 considers expenditure to be an allowable deduction. The section 25.5 of Income Tax Assessment Act 1997 shows deduction on the expenditure that an individual incur. The deductions are divided into general deduction, specific deductions and no double deductions. An individual can deduct ay loss from the assessable income. The deductions are available of having provisions of this act and two or more provisions of the act are not allowed to be deducted in respect of same amount (Herault and Azpitarte, 2014). The title of the section is Division 8 – deductions. Section 40 shows capital expenditures are also deducted.

7. Section 15 of Income Tax Assessment Act 1997 shows value of allowances in the assessable income. There allowances are available in respect of employment or services, insurance for losses and subsidies. The assessable income also includes value of all the allowances, compensation, gradates, premiums, bonuses and benefits provided to an individual in respect to any employment or services rendered by him (The international tax handbook, 2013).

8. Yes, the values of the allowances are provided in the monetary form. The information can be found in the Australian Legal information websites. The income tax assessment act 1997 shows the taxation system and legislation describing all the rules such as allowances and deductions (Lloyd, 2015).

Definitions and Policies under Income Tax Assessment Act 1997

9. The Taxation Ruling TR 2013/2 main focus is on income tax: college or school building funds. The ruling includes section 30-15 and subsection 30-25 (1) of Income Tax Assessment Act 1997 apply to individuals who make contribution or gift to public fund that purports to be a college or school building fund.

10. The tax determination TD 2016/3 sets out rates for cent per kilometers for the private use of the motor vehicles for Fringe Benefit Tax year starting 1 April 2016. The applicable rate for the motor vehicles is as follows:

Engine Capacity	Rate Per Kilometer
0-2500c	52 cents
Over 2500 cc	63 cents
Motorcycles	16 cents

The tax situation of Australia determines the residency context status which is stated as per the case study of the Midoona. The residential and the non-residential laws are conducted for the case of Midoona which provides fruitful outcomes with the consideration of the taxation system of Australia. Since Midoona is pop star, she travels around Australia for conducting shows and thereby the income is made in a prosperous way (Barkoczy et al., 2012). For this the Australian taxation laws seems to be implemented on the income made by her and thereby income law of Australia under the status coming to Australia is implemented on her income.

With considering the income tax of Midoona, she had to pay tax on the basis of the income made and thereby the deduction of the amounts is made with the consideration of the related earnings. With the consideration of the taxation system of Australia, it includes declaration of the income, deductions can be claimed, offsets and the rebates made, income tests (Burrell and McGinn, 2009). The case study is judged on the basis of the topic related to the income taxes and thereby the amount of the tax paid with claiming for the extra deductions made and also based on the part of the earnings made directly for the shows conducted. The travelling tax for Midoona seems to be implemented with being the foreign resident of Australia and thereby the different residency statuses of taxes are created with the consideration of tax purpose (DZHUMASHEV and GAHRAMANOV, 2010). Since Midoona visits the Imperial Hotel for the purpose of conducting shows, thereby the income tax is deducted from the income made and thereby the tax seems to be applicable only on the income made and not on the prizes that are owned by Midoona.

Midoona also earned $45000 from her job as a kartoake hostess. For this the appropriate taxation file must be created which must be displayed for the appropriate conduct of the taxation laws and the reforms of Australia. Thereby the taxation system seems to be maintained appropriately by Midonna with following the rules and the regulations of Austalia (Meagher and Agrawal, 2008). Henceforth the subscription of the process is created in the context of job for which the income tax is also implemented. As per the rules of the taxation, the deduction of taxes seems to be taking place from the form of the amount received and with the consideration of job, the taxation amount of an individual must be deducted from the salary or the wages paid. These are the taxation rules that seem to be implemented on Midoona with the consideration of the non-resident of Australia and the job status provided as per the case study.

Deductions and Allowances under Taxation Law

In is most important for the tax payer to check his/her residency status in order to pay tax as the assessable income for the tax consequence will be calculated according to the residency status of the tax payer. In Australia there are certain norms and rules to determine the residency status of the tax payers. For the citizens of foreign country, who lived in Australia at one place for more than six months of a specific taxation year are included as Australian resident for tax purpose for that specific year. Moreover, the tax for the individuals would be calculated as per the Australian residents’ tax calculation. For the undertaken case of Midoona, it is observed that she arrived in Australia on 2^nd July 2015 as per her schedule musical tour around world (Munk, 2007). She is a pop star and she performs music all around the world. Her home town is Bourbon-On-Ryde a quaint English town. She came Australia for a music tour. Moreover, she did not stay in a single place more than 6 months. She came to Sydney and after concerting at Sydney she perform at Adelaide and she did stay six months continually in either place as she arrived on 2^nd July 2015 at Sydney and completed her music tour in Australia at Adelaide on 15^th August 2015. After finishing her music tour she with her children spent vacation in Australia and visited the Northern Territory town of Darwin and on 15^th September she departed from Australia to her home town and she spent only one moth at Northern Territory town of Darwin thus, none of the place in Australia she spent six months continually, thus in this situation she would not be considered as Australian citizen for the taxation year 2015-2016. However, on 1^st April 2016 she again came to Australia and this time for a fixed job of 2 years and she probably will reside in a same place during the next two years (Thomas, 2010). Thus, for the next financial year 2016-2017 she will be considered as Australian resident for tax purpose.  

	Income ($)		Expenditure ($)
Australian tour	450000	operating expenses	380000
Appearance fees	15000	Spend on dresses	1000
Cash Prize	1000	Subscription to magazine	200
Cash Prize	200	Membership subscription	500
Income from job	45000
Tips from customer	2500
	513700		381700
Assessable income	132000

The tax rates for the non resident for the year 2015-2016 are as follows:

Taxable income	Tax on the income
0-$80,000	32.5c for each $1
$80,0001-$180,000	$26,000 plus 37c for each over $80,000
$180,001 and over	$63,000 plus 45c for each $1 over $180,000

Middoona has to pay tax as per the Australian Taxation law. The assemble income of Middona is $132,000. Therefore, the tax is to be paid under the slab $26000 plus 37c for each over $80,000 as per the Australian Taxation Law. The foreign resident in Australian would be considered for tax purposes. Midoona has to pay tax on the income earned from different sources. At first, Middona earned $45,000 from the Australian tour and performing a show . She also appears on the Affairs of Today show from where she earned an appearance fees of an amount of $15000. After that she also wins a prize that consists of weakened at Alatai Holiday Apartments and a cash prize of amount $500 each. The income earned is governed by the taxation rule of Australian Taxation Office (Quinn and Milazzo, 2010). She also wins cash prize from a stiff competition of amount $200. She earned $45000 from a job as the Karaoke hostess at Imperial Hotel in the Darwin. All these incomes will be consider as assessable income for Midoona and tax will be calculated. Midoona also received a tip from the customers at a hotel amounting to $2500. However, she had also expensed some of money for its personal needs and all those costs are deducted from the income. The expenditures that are included are operating expenses, spending on two dresses, subscription to magazines and yearly membership subscription in a monthly newsletter. The Australian Taxation Law explains the income tax that to be implemented on the assessable income. Midoona has to pay tax on the income earned from different activities as she is foreign resident for the tax purpose. The Australian Taxation Law explains the income tax rules.

3. The justification provides for the case study depicted depicts the ITAA36 and ITAA97 taxation rules which comes under the Act of 1953. It henceforth determines the tax Assessment which helps in explaining issues with the consideration of rulings in the form of the Income tax assessments. The expenses are also related to the acquisitions that holds or disposes are enabled with the creation of assurance policies. It thereby also helps in the creation of appropriate income tax assessments with the creation of assurance policies and also increases the value of the investments related to the policies created. The deduction policies are created with the consideration of the provisions made and also the investments that are made are also calculated in the income tax which must be paid. The taxation rulings for the investment and the administration with the creation of charges on the capital nature and incurring of the existing deductions are made with considering the profits, gains and the bonuses earned (White, 2009). Henceforth the section provides appropriate judgement for the charges that are applied on the administration and on the capital nature of the income made. Therefore the income tax is seemed to be deductible from the income received with the consideration of the type of the income made.

Residency Status for Taxation Purpose

With the consideration of income from the Australian tour, Midoona earns a lump sum amount of money for which the tax seems to be implemented on the income made by Midoona. The tax is implemented on the amount $450,000 which is earned by Midoona during the Australia tour. As per the Taxations laws Acts of Australia, the tax is calculated on the basis of total income made and the total expenditures created. The deduction must be made on the basis of income earned and the expenditures created which helps in the formation of the appropriate justification of the taxation system in the context of the taxation law of Australia (Woellner, 2013).     

The Appearance fees are seemed to be collected in the form of appearing in the magazine of “The Affairs of Today” for which she collects the fees of $15000. The cash prize seems to be received for winning the competition organised in the Altai Hotel Apartments with the amount of $500 and the values of the apartment is also $500. The income made from job of Karaoke hostess in the Imperial Hotel Darwin seems to be $45000 for Midoona and the tips collected by Midoona is about $2500 from the hotel only. On the basis of these incomes, the tax is seemed to be implemented in the form of the Australia’s taxation law which is seemed to be implemented in the activities that is carried out. On the basis of these activities the tax is calculated and thereby the tax must be provided for the consideration of the laws of Australia.

References          

Amatucci, A., GonzaÃŒÂlez, E., Trzaskalik, C. and Amatucci, A. (2006). International tax law. The Hague: Kluwer Law International.

Avi-Yonah, R. (2007). International tax as international law. New York: Cambridge University Press.

Barkoczy, S., Rider, C., Baring, J. and Bellamy, N. (2012). Australian tax casebook. North Ryde, N.S.W.: CCH Australia.

Boxer, A. (2008). TAXATION IN AUSTRALIA*. Economic Record, 41(96), pp.639-649.

Burrell, D. and McGinn, J. (2009). Cornerstone law series. [Adelaide]: Law Society of South Australia.

Deutsch, R. (2013). Australian Tax Handbook. Pyrmont, N.S.W.: Thomson Reuters.

DZHUMASHEV, R. and GAHRAMANOV, E. (2010). A Growth Model with Income Tax Evasion: Some Implications for Australia*.Economic Record, 86(275), pp.620-636.

Herault, N. and Azpitarte, F. (2014). Recent Trends in Income Redistribution in Australia: Can Changes in the Tax-Benefit System Account for the Decline in Redistribution?. Economic Record, 91(292), pp.38-53.

Lloyd, P. (2015). Excise Tax Harmonisation in Australia at Federation. Aust Econ Hist Rev, p.n/a-n/a.

Meagher, G. and Agrawal, N. (2008). Taxation Reform and Income Distribution in Australia. Australian Economic Review, 19(3), pp.33-56.

Munk, K. (2007). Tax-tariff reform with costs of tax administration.International Tax and Public Finance, 15(6), pp.647-667.

Quinn, P. and Milazzo, S. (2010). Cornerstone series. [Adelaide]: Law Society of South Australia.

The international tax handbook. (2013). Haywards Heath, West Sussex, UK: Bloomsbury Professional.

Thomas, G. (2010). Cornerstone law series. [Adelaide]: Law Society of South Australia.

White, R. (2009). Cornerstone law series. [Adelaide]: Law Society of South Australia.

Woellner, R. (2013). Australian taxation law 2012. North Ryde [N.S.W.]: CCH Australia.