Taxation Department Prioritizes Residency Status
According to the case study, to be a citizen of Chilean kit is considered to pay the tax which is charged on him as per the Australian taxation law. There are so many evidence that support that kit should pay the tax to the government of Australia. The case study shows that due to a citizen of Australia he is charged for the tax though he was an employee of an American company. During his work, he had to stay outside Australia for a long time. Kit’s wife lives in Australia since the last three years with their children. Kit and his have a joint account in an Australian bank. All of his salaries was transferred to that account (Barker, 2007). Due to his wife and children have the citizenship of Australia he becomes able to pay the tax bill according to the law of Australia. Kit has invested money in the business of Australia and also have planned for settle down in Australia. All these above things show that kit was enough eligible to get the citizenship of Australia and was charged for the tax according to the taxation law of Australian government. The kit was planning for a permanent residential address in Australia. For this reason, the Australian taxation law charged taxes for him.
The fact residency of the taxable person is majorly prioritized by the taxation department of the Australia. The tax should be charged as per the eligibility of the person for whom the taxes are charged, and it should understand by the government of the Australia. The taxation department of Australia likes to treat the non-residential and the residential taxes separately, so they want to understand the situation of the individual taxpayer (Harvey, 2009). So the taxation department likes to give more priority to the person’s residential status. The different incomes are separately charged in Australia. The domestic earning or the income from the foreign business does not involve the taxation charge. If the department of tax in Australia consider any person as the tax payer then the taxes will apply to him according to various Australian laws.
In the case of a non-residential tax, the every kind of income of any person will be not included under the taxation law. The earning of the people is charged based on the different laws related to the taxation law of Australia. The compulsory involvement of the government can be the correct explanation for the taxation law. The taxes are charged on the people, their property, income, and their essential commodities. There are three rules which can describe the tax; they are the state rules, local rules, and the central rules. The Australian taxation law introduced majorly two kinds of taxes such as the direct tax and the indirect tax.
Separate Treatment of Non-Residential and Residential Taxes
Few special characters are involved in the taxes which involve the compulsory payment that can reduce the governmental issues. The tax payments are not considered as the penalties. In fact, several goals are related to the collection of the taxes. The taxes which are collected from the public are also used for the improvement of the condition of ordinary people. The biggest problem for the Government is to collect the tax from the public. Through this tax, the government can drive the economic forces which help to spend the collection of tax (Oppenheim, Jennings and Watts, 2008). It also helps to determine the actual position of the economic sector. The success of the objective can be gain from the free market. In the case of the non-residential tax, the person doesn’t need to pay the Medicare tax.
So in the case of kit, he was forced to pay the tax that is charged for him because there is enough prove that supports tax charged for Kit. The non-resident tax is worse than the resident tax. The taxes are collected by the universal income. The bank incomes which are applicable for the citizens are based on the standard rate. In fact, the capital gain taxes are also applicable for them.
The following tests suggest the Kit was a citizen of Australia and he was quite eligible to pay the tax bill:
- If the number of times the person returns to the country varies in each case, then he will not be taken as a non-resident of the country.
- If he has any relatives of his family residing in Australia or some business deals, the person is considered to be a resident of Australia
- Whether the family member accompanies the person while he embarks to Australia on varying kinds of trips.
- Whether the person is assigned to do the job in Australia on a strictly regular basis.
- If there are personal belongings permanently kept in the country (Shaw, 2003).
- The amount of financial assets of the person kept in any of the banks in the country is also an important factor in this case.
- Whether the person who is migrating to the country has just started the business or has established it comfortably is also an important factor.
There is a domicile test consisting of varying features that ensure the fact that the person in consideration is a domicile. The other criterion that must be fulfilled by the person is that he must have lived in the country in consideration, for a period of more than 183 days which is equivalent to six months. In the given case, the person Kit has been living in the country for a considerable amount of time. Also, another fact that must be noted is that the person is residing in that country for a certain amount of time. Since the person’s family members are residing for a period of more than three years, hence the person qualifies as a citizen of the country. The person’s family and both his home are situated in the country. So it can be clearly seen that despite the fact that kit is a Chilean citizen, he also stands liable for payment of the taxes in Australia exactly like an Australian citizen. Kit is eligible for the payment of the required taxes for the income that he earns in Australia since he is considered as the resident of the country (Von Glahn and Taulbee, 2017). Although there are a few properties belonging to him in Chile, yet both his wife and children are the citizens of the country. Hence Kit can be called an Australian citizen. The other payment of taxes corresponding to the properties located in Chile should be made in accordance with the Chilean rules.
Compulsory Involvement of Government in Taxation Law
The main objective or intention of a company in this case was to get a land on the company’s hand which contained copper. Consequently, the company as consideration sold the land or property to another company and expected shares in that individual company. The reason was the common incident of the tax payer’s trade and industry and selling profits in nature. The copper was did not taken out by the company. The court held that the deal of the land was income in future because by any means of intention of the individual company was to make revenue and income by selling that particular land (Woellner, 2005). For that reason, this was a regular incident of the tax payer’s production and profits in nature.
To determine the sell the property of the land after the company makes a decision. After a certain period of time all the coal was taken out from that land. The company in this case set up the business of mining coal on the land or the buying property which was purchased by the company. To make it more money-making, the company subdivided, and constructs roads and other communications on that property or land. The company was not in the business of selling of property on the land simply because it becomes about the capital asset to its best advantage. The court detained that the gaining or the profits were not be applicable to be gauged for the reasons. Therefore, as a results the income or profits were capital in nature.
The company in order to purchase the land and have some rights to use the beach for fishing purpose. The land was beach frontage which has right to use and a group of persons to use the beach for fishing purpose. In this case, the tax payer was an association or a company which was included for the motivation of obtaining an area of undeveloped land at the Beach of Whit fords. All of the challenging share capital of the tax payer of the company was sold. After some years as a result of order to better to throw out all the problematical capital share tax payer of the company. The main aim or objective or aim that the tax payers would increase the subdivided and selling housing sites at a profit. The new shareholders bought the shares only to have control on the land. The High Court under arrest that the tax payer was set up a big business of land expansion and profits obtained by selling the land were experimental as regular income. When the subdivided possessions or property was finally sold, the tax payer differ that the profits were not usual proceeds. The sale of the business activity of the land was a common occurrence and therefore quantifiable profits. The court apprehended that at the time when the original shareholders get hold of the control on the corporation, the objective distorted and that it now had a function of developing, subdividing and advertising the land, rather than a reason of non-commercial investment (Woellner, 2013) . The new shareholders buy the shares simply to have managed on the land and with the purpose or aim that the tax payer would enlarge, subdivide and sell housing sites at a profit. For that trade and industry activities the sale of the land or the property was an original incidence of the selling of the land was a common incidence and income also.
The tax that was assessed due to managed in a wrong way. Later this case study was related to the regular tax. This case study was decided that the commissioner had adjusted the income of the estate.
It was related in case of profit makings intention to the demonstration of the circumstances where there is lack of profits was related in this case. The fact that the person was going to draw profit by selling a certain piece of land.
In the given case, the sand company was in possession of the land after the extraction of the sand from the land. The company was in possession of the land and was in no circumstances interested to sell the land to the other taxpayer until the increase in the prices. This was thus an attempt towards increasing the return. As a result of opting such a measure, the company held the land for a longer time period, and the land was also not put to any kind of use. On the sale of the land latter on, a conflict arose concerning the tax that was required to be paid. The court gave the verdict that the land could be sold or used only for commercial dealings (Woellner et al., 2016).
The case under consideration relates to a farmer who is taken as a taxpayer. The farmer was found trying to buy a land stretch. But this land stretch was actually disputed. Finally, the farmer received the land.
The case dealt with a land that was owned by two siblings. The land contained a few houses, which were removed for the renovation of the land. The conflict was concerning whether the siblings were required to pay taxes for the land. The verdict which was finally declared was in favor of the siblings and said they were not required to pay taxes.
References
Barker, D. (2007). Essential Australian law. Abingdon [u.a.]: Routledge/Cavendish.
Harvey, C. (2009). Cornerstones of Australian law. Prahran, Vic.: Tilde University Press.
Oppenheim, L., Jennings, R. and Watts, A. (2008). Oppenheim’s international law. Oxford: Oxford University Press.
Shaw, M. (2003). International law. 1st ed. Cambridge, U.K.: Cambridge University Press.
Von Glahn, G. and Taulbee, J. (2017). Law among nations. New York: Routledge.
Woellner, R. (2005). Australian taxation law 2006. Sydney, N.S.W.: CCH Australia.
Woellner, R. (2013). Australian taxation law 2012. North Ryde [N.S.W.]: CCH Australia.
Woellner, R., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D. (2016). Australian Taxation Law 2016. Melbourne, Vic.: Oxford University Press.
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