Can Robyn be taxed on any part of her salary, from Victoria University, in Australia for the 2016/17 tax year and any other years she acts as coordinator in Kolkata. Fully explain your answer.
The case study throws light on a case where an employee of Victoria University is in dilemma regarding taxation of her salary. As per case Robin Rainer is an immigrant of Australia, maintains two bank accounts in two different countries. The main objective of this case study is to analyses whether Robin is a present resident of Australia during the year when she is serving her tenure at her work place. [1]Therefore income tax based upon the concerned year is to be considered. It is equally important to determine Robin’s both residential information for balance maintained in her different accounts. Australian tax laws follow certain rules as per directions of government, minimum satisfied for calculating residency status with the help of residency tests in s 6(1) of ITAA 36 (TR 98/17).
Hence Ms. Robin Rainer case was subjected to the resident of Australia test where proper definition of resident is explained in s6 (1) of ITAA 1936 (TR 98/17).
In this test some of the factors playing significant role are as follows:
Robin is considered as an Australian resident for the tenure she is serving her work place, if she fulfills all the criteria related with the definition resident and identified by ATO in 98/17 [2]. Based on the fragmented information provided in the case study, here we have considered factors that determine Robin’s residential information in Australia as well as India. Robin successfully satisfies all the factors of being a resident of both the countries where the evidences speak of her relocation for only job purpose[3]. Thus, based on the evaluation of the case reference, it can be concluded that Robin has wisely adjusted his earnings. Receipt of unexpected income of $ 50,000 from college in June helped her repairing David’s golf buggy, which he earlier asked his students to pay for rather than paying fees. In addition to these, change in the course fee structure helped her more to increase his income. Moreover, Robin’s income from the agreement with Eastwood Golf Club to provide instructions regarding property rights in Australia along with those who have not yet being permanent resident so that she gets a clear idea of income tax charged on her property.
Robin is serving Victoria University as a coordinator for quiet long time. Here at this crucial point opposition can easily contradict her of not being an original Australian resident therefore her income tax should go into Gross national product. Evidences have also provided information that she pays house rent in Australia and do not has own house. Her work place pays her travel allowances to travel college from her place, also she meets bonus from the university where she is sent for travelling the country at college fund’s cost, These information are sufficient to explain her intention to stay in Australia after her contract terminates on part time basis [4].
According to cases like IRC v Lysaght (1928) AC 234 and the case of Levene v IRC (1928) AC 217, Robin satisfys all the criteria of residence test. Therefore as per test, Robin is a resident of Australia for tax purpose, although she may not permanently going to reside there.
Next we have to perform the domicile test after success of resident test. It is evident that robin is resident of Australia at present. She pays rent on flat there. She has her own family in India to look after, she transfer a part of her salary to Indian bank branch from where her family can easily withdraw. This pictures clear evidence being a resident of Australia and indian citizen every month she deposits money to both the accounts. Hence tax is payable from both the branches. Domicile and permanent place of abode says, Robin automatically has been proved to be citizen of Australia, because Robin’s has a place of abode in Melbourne.
Next comes the effective test. 183 day test rule. Robin is working as a coordinator in victoria university for more than five years hence she has citizenship of Australia right now but her official documents revels that that she had arrived there on 18th march 2001 between this tenure she opted for a maternal leave dated 23rd May 2006 and travelled back to India [5]. she returns again back to Australia on 21st May 2007, and she continues again with her work again at university. Thus she was in leave for 1yr only. Hence again it is confirmed that Robin was present in Australia for more than 183 days for both before and after her leave [6]. She pays rent on flat there. She has her own family in India to look after, she transfer a part of her salary to Indian bank branch from where her family can easily withdraw. This picture clear evidence being a resident of Australia and Indian citizen every month she deposits money to both the accounts [7]. Robin won a noteworthy golf competition winning $50,000 at her college fest tournament which was held for teaching staffs. She demonstrated her thankfulness to her brother Paul who always stood for her and supported her. Robin gifted Paul for his superb showing she had given him the $10,000.
According to the Australian taxation office, income under head personal services income, business income and commissions or compensation payments will be considered as assessable income for the tax purpose. If an individual earns more than 50% of the amount received for the contract work (especially from individual skills or expertise) from the business[8]. On the other hand, if the individual earns any kind of commissions or compensation on the part of any business activities will be considered as assessable income for tax purpose
This is also a kind of test performed in such cases but as per case study provided, Robin case is exempted from this test.
Hence it can be said that Robin is a resident of both Australia as well as India for tax purpose, and her income from both her accounts are tax chargeable[9].
Robin is considered as a citizen if she fulfills all the factors related to term ‘resides in’ as defined in ATO in 98/17. We are considering all information as well as factors to understand citizenship of Robin. Robin resides in Australia for a very long time and continues to reside there thereafter. She has he, and she fall family in India where she has taken total responsibility of her family.
Conclusion
From the above discussed sections It can be concluded, In spite Robin not being a permanent resident she meets all her duty and legal procedures on time. She is known to pay $1000 for her house rents, and sending half of her salary to her family India. Juliet intends to return India as soon as her she pays of her new house loan in Kolkata. In addition to she receives a good amount of interest from banks and her fixed deposit. Hence it is confirmed and reconfirmed from the above discussed sections that she bears citizenship of both countries and her salary is obviously taxable. All the tests performed to study the provided case are very much effective and productive to obtain confirmed verdicts. According to the survey information of the tests final result is concluded. Also expert personals has checked all the official documents and id cards for being a responsible citizen and Rabin’s all documents are clearly verified.
Reference List
Barkoczy, S., 2016. Foundations of Taxation Law 2016. OUP Catalogue.
Barkoczy, S., 2017. Core Tax Legislation and Study Guide. OUP Catalogue.
Berg, C. and Davidson, S., 2016. Submission to the House of Representatives Standing Committee on Tax and Revenue Inquiry into the External Scrutiny of the Australian Taxation Office.
Blakelock, S. and King, P., 2017. Taxation law: The advance of ATO data matching. Proctor, The, 37(6), p.18.
Fry, M., 2017. Australian taxation of offshore hubs: an examination of the law on the ability of Australia to tax economic activity in offshore hubs and the position of the Australian Taxation Office. The APPEA Journal, 57(1), pp.49-63.
Hedges, J., Anderson, H.L., Ramsay, I. and Welsh, M.A., 2017. No’Silver Bullet’: A Multifaceted Approach to Curbing Harmful Phoenix Activity.
Vann, R.J., 2016. Hybrid Entities in Australia: Resource Capital Fund III LP Case.
Woellner, R., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D., 2016. Australian Taxation Law 2016. OUP Catalogue.
Barkoczy, S., 2016. Foundations of Taxation Law 2016. OUP Catalogue.
Blakelock, S. and King, P., 2017. Taxation law: The advance of ATO data matching. Proctor, The, 37(6), p.18
Berg, C. and Davidson, S., 2016. Submission to the House of Representatives Standing Committee on Tax and Revenue Inquiry into the External Scrutiny of the Australian Taxation Office
Fry, M., 2017. Australian taxation of offshore hubs: an examination of the law on the ability of Australia to tax economic activity in offshore hubs and the position of the Australian Taxation Office. The APPEA Journal, 57(1), pp.49-63.
Berg, C. and Davidson, S., 2016. Submission to the House of Representatives Standing Committee on Tax and Revenue Inquiry into the External Scrutiny of the Australian Taxation Office
Vann, R.J., 2016. Hybrid Entities in Australia: Resource Capital Fund III LP Case.
Woellner, R., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D., 2016. Australian Taxation Law 2016. OUP Catalogue.
Woellner, R., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D., 2016. Australian Taxation Law 2016. OUP Catalogue.
Hedges, J., Anderson, H.L., Ramsay, I. and Welsh, M.A., 2017. No’Silver Bullet’: A Multifaceted Approach to Curbing Harmful Phoenix Activity.
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