1. i: The pertinent point provided on the part of the airline organisation does not fall under taxation ruling. This is a direct indication that this kind of income could not be adjudged as income. However, there is absence of specific rules regarding the organisational benefits to the staffs, which fall under the fringe benefit tax directly. Various scenarios are inherent, in which the reward points could be taken into account under fringe benefit tax. For example, if a staff receives a reward point that the employer has offered as benefits, it could be adjudged as taxable amount falling under the fringe benefit tax. The second example is primarily at the time the reward points are offered to the staffs in a specific arrangement with the organisation. However, in this specific case, there is absence of any identified circumstance that signifies directly the absence of taxation on the reward points provided on the part of the airline organisation (Barkoczy, 2016).
ii: The provided case primarily signifies that damage payment has been carried out on the part of the service receiver. This signifies directly that the service receiver is required to carry the burden of the overall tax amount. The conducted damage to the capital asset does not fall under the taxable amount related to the receiver of payment. This has direct indication that the service receiver is required to incur the entire tax amount for the capital damage, which is carried out. However, some assets need to be taken into consideration before the identification of the taxable asset. This need to be taken into account as capital and the organisation could make thorough utilisation of the same. Along with this, the asset needs to be depreciated as well under the clause of depreciation, which needs to be depicted in the annual report. Hence, the payment of compensation related to crane is not taken into account under taxable income (Braithwaite, 2017).
iii: The provided case study primarily depicts the presence of pertinent gift, which the supplier has provided to the owner of the nightclub. However, in accordance with the taxation law of Australia for the individuals, small kind gifts are not taken into account pertinently. Conversely, the big-sized gifts and expensive gifts are considered as well for the overall taxable income. Moreover, the big-sized gifts, which could be converted into amounts of greater cash value or cash, could be taken into account under the receiver’s taxable income. Hence, based on the case scenario, it has been observed that the nightclub manager has obtained the entire package for the overseas holidays having pertinent monetary benefits received on the part of the manager. This primarily denotes that the individual taxation of the manager would comprise of the entire overseas packages provided on the part of the supplier (Cao et al., 2015).
iv: The whole scenario primarily denotes that the additional funds have been accumulated from the members of the club in order to buy canoe. This has primarily enabled in obtaining an overview that the individuals utilising the donated funds to the canoe club is not deductible under the taxation rule. Hence, any return provided from the club could not be adjudged as excess income. The entire income for the individual members has induced the entire funds, which are paid to the club. Hence, the total income of the individual members would have no influence on the monetary returns provided on the part of the club as excess income and the depiction would be made in the form of taxable income (Davis et al., 2015).
v: The entire case scenario primarily denotes that the pertinent payment has been carried out to a football player on the part of a television organisation. In accordance with the “Taxation ruling in Australian TR 1999/17”, it primarily signifies that any sports personality making income from the individuals related to the sports performance need to be taken into account under taxable income. Moreover, this has direct indication that the pertinent income generated on the part of the football player from the television organisation would be taken into account like the taxable income. Henceforth, the individual taxation law denotes that the pertinent taxes are required to be incurred on the part of the football player, since the amount provided on the part of the television organisation is considered directly in the form of taxable income. Such taxable income is required to be taken into account under the “Rulings TR 1999/17”, in which the pertinent taxes are required to be incurred on the part of the sports person (Douglas et al., 2014).
vi: The provided case study primarily depicts that the expenditures pertaining to building qualification for the apprentice of the building has been carried out. In compliance with the “TR 95.22”, pertinent consideration for the allowance deduction to the staffs of the construction organisation could be detected. This signifies mainly that the pertinent expenditures carried out on the building apprentice is subtracted pertinently for the construction organisation. Hence, the total expenditures carried out on the part of the construction organisation could be utilised as deductible expenditures, which minimise the entire taxable amount of the organisation. According to “TR 95/22”, some pertinent abbreviations are used, which are summarised briefly as follows:
Hence, the total expenditures identified from the assessment of the case study majorly signifies that expenditure carried out on the apprentice of the building is stated directly in the form of compensation, which is deductible under the Australian taxation law (Lang, 2014).
vii: The pertinent condition primarily signifies that the pertinent expenditures are carried out majorly for a short course in art management for becoming an art director. This has direct indication that the total expenditures are carried out for enhancing the overall individual career. This falls under the Australian taxation law and it is deductible from the overall amount of taxation. However, various criteria are inherent that is required to be assessed before the expenses are detected as deductible from the taxable income. Moreover, pertinent criteria are needed to be followed like the module of education and software conducted on the part of the individual, which is required to enhance its overall future income. Moreover, the course related to short-term fees is allowed primarily as deduction, while ignoring the other education facilities.
viii: The situation indicates that the pertinent expenditures related to dresses and make-up are carried out on the part of the individual. There is deduction of pertinent taxation for the expenditures carried out on the artist about to perform. Such tax deductions are restricted primarily to the subsequent or specific individuals (artists) and this could be provided as the pertinent exemptions. The performing artist depicted in the rule of taxation could be singer, actor, musician, artist, dancer and circus performer. Hence, any type of expenditures carried out on the performing artist is allowed in the form of a deduction on the taxable amount. Therefore, the expenditures carried out on the dresses and makeup that are associated with work are deductible from the overall taxable income (Novikov, Ling & Kordzakhia, 2014).
ix: The situation denotes that the total expenditures are carried out on the part of an individual travelling from house to the workplace. This solely represents that the pertinent deductions could be possible under the law of taxation, in which the travelling for work purpose could be subtracted from the amount of taxation. However, any type of non-official expenditure carried out on travelling could not be detected in the form of deductible expenditures from the taxable income. In addition, it has been assumed that the expenditures related to travelling from home to office are for office work, the nature of which is deductible in accordance with the taxation law of Australia. However, on a various assumption, if the travelling expenses are for personal use, it could be deducted in compliance with the taxation law of Australia. Hence, the ascertainment of expenditure is crucial to identify the total measure to be carried out on taxable income (Saad, 2014).
x: The provided case study primarily denotes that the total travelling expenses are mainly carried out on the part of the individual for official purposes. The total expenditures carried out on travel is mainly productive in nature in conformance to the taxation law of Australia. In accordance with this taxation law of the nation, any type of expenditure carried out for official purposes are deductible in nature, which could be utilised directly to minimise the taxable income. In accordance with the scenario, the total expenditures have been carried out from one place to another. In this case, it could be utilised as a deduction amount for the overall taxable income. Hence, the total expenditures could be subtracted on the part of the employer from its taxable income.
2:
|
Assessable Income of Manpreet For the year ended 2016/17 |
||
|
Particulars |
Amount |
Amount |
|
Gross Salary |
AUD 45,000.00 |
|
|
Foreign Income |
||
|
Income From Trust |
AUD 10,000.00 |
|
|
Total Income |
AUD 55,000.00 |
|
|
Deductions |
||
|
Purchase of mobile work purpose |
AUD 500.00 |
|
|
Total Deductions |
AUD 500.00 |
|
|
Taxable Income |
AUD 54,500.00 |
|
|
Total tax |
AUD 9,259.50 |
|
|
Low income tax offset |
AUD 182.50 |
|
|
Medicare Levy |
AUD 1,090.00 |
|
|
Tax Payable |
AUD 10,167.00 |
The above-stated table primarily enables to identify the entire taxable income of Manpreet for the financial year of 2016. It has been observed that the sole Australian residents are responsible for providing pertinent taxes to the government, which would be decided with the help of considerable residential method in ascertaining the requirement for taxation. Based on the case study, it has been found that Manpreet has been residing in Australia for above six months and as a result; such duration of stay has helped the person in becoming the resident of Australia. In this case, there is need for payment of pertinent taxes. Manpreet earns nearly $45,000 from the part time job that directly assures that the person is required to incur the pertinent individual tax (Taylor & Richardson, 2013).
Manpreet has incurred various kinds of expenditures for education purposes, which does not signify any type of improvement in income from part time work. Hence, both computer expenditures and educational expenditures could not be deducted from the overall amount of taxation. In accordance with “Section 8-1 of the Income Tax Assessment Act”, the expense having domestic ort private nature could not be subtracted under this act. Therefore, both the expenditures incurred for education and computer could not be deducted under the taxation law of Australia. However, any type of expenditure carried out for improving the income or career of the individual is deductible under the taxation law of Australia. There are certain case laws that could be utilised to support the individual taxation law of Australia (Tran-Nam, Evans & Lignier, 2014). These laws include “Lunney v. FC of T; Hayley v. FC of T (1958) 100 CLR 478”, “Ronpibon Tin NL v. FC of T (1949)” and “FC of T v. M I Roberts 92 ATC 4787”.
References:
Barkoczy, S. (2016). Foundations of Taxation Law 2016. OUP Catalogue.
Braithwaite, V. (Ed.). (2017). Taxing democracy: Understanding tax avoidance and evasion. Routledge.
Cao, L., Hosking, A., Kouparitsas, M., Mullaly, D., Rimmer, X., Shi, Q., … & Wende, S. (2015). Understanding the economy-wide efficiency and incidence of major Australian taxes. Treasury WP, 1.
Davis, A. K., Guenther, D. A., Krull, L. K., & Williams, B. M. (2015). Do socially responsible firms pay more taxes?. The Accounting Review, 91(1), 47-68.
Douglas, H., Bartlett, F., Luker, T., & Hunter, R. (Eds.). (2014). Australian feminist judgments: Righting and rewriting law. Bloomsbury Publishing.
Lang, M. (2014). Introduction to the law of double taxation conventions. Linde Verlag GmbH.
Novikov, A. A., Ling, T. G., & Kordzakhia, N. (2014). Pricing of volume-weighted average options: Analytical approximations and numerical results. In Inspired by Finance (pp. 461-474). Springer International Publishing.
Saad, N. (2014). Tax knowledge, tax complexity and tax compliance: Taxpayers’ view. Procedia-Social and Behavioral Sciences, 109, 1069-1075.
Taylor, G., & Richardson, G. (2013). The determinants of thinly capitalized tax avoidance structures: Evidence from Australian firms. Journal of International Accounting, Auditing and Taxation, 22(1), 12-25.
Tran-Nam, B., Evans, C., & Lignier, P. (2014). Personal taxpayer compliance costs: Recent evidence from Australia. Austl. Tax F., 29, 137.
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