Taxation Laws In Australia: Advice On Treatment Of Various Scenarios

Webjet frequent flyer points received by a business analyst

Answer to i) Receiving flyer point from Webjet

The situation mainly defects that there is relevant benefits provided to a business analyst flying regularly from Webjet. Under the normal circumstances these overall benefits that are provided by airline companies are not considered under taxable income, as stated in Taxation Ruling of TR 1999/6. However, the Australian taxation ruling also states that there is some criteria’s, which needs to be met before allowing the expense as tax exemption. The overall benefit that is provided by Webjet is not considered under taxable income or Fringe benefit tax, until and unless these factors are proved (Bird and Zolt 2014.). There is a relation between employer and employee when they could be considered as a family. In addition, if the overall reward points is provided to the employee in terms of his/her employment agreement. Lastly, the flight points provided by Webjet are under a particular arrangement. However, evaluation of the scenario mainly states that there is no agreement between the employee and Webjet or the employer and Webjet, which directly excludes the benefit from taxable income.

The situation mainly states that relevant compensation is been received by the company from a customer for damages conducted on its Capital Asset. According to the Australian taxation law, the overall damage payment that is conducted on capital assets cannot be considered under Taxable income. Furthermore there are certain criteria that need to be followed by an organisation for not including the damage payment of capital assets as their capital income (Lang 2014). Firstly, the assets should be used by the organisation thoroughly, which directly reduces the overall taxable income. The second measure mainly states that the Capital Asset is adequately listed in the annual report where adequate depreciation is been conducted. This measure is relevantly important, as it allows the Australian taxation authority to understand that the Capital Asset has been used by the organisation for more than one fiscal year.

The scenario mainly states that relevant holiday package is been provided to the nightclub manager by the supplier of alcohol. This relevant Arrangement mainly states that the benefit or gift provided by the alcohol supplier is relatively higher in value. According to the Australian taxation authority, low budget gifts exempted from the taxable income, whereas High Budget gifts are directly included into the taxable income. This mainly helps in reducing the any kind of unethical measures that is conducted by employees and owners.  Moreover, the scenario mainly states that holiday package has higher value, where the night club manager needs to add the benefit to its taxable income. in the Australian taxation office the measure mainly states that any gift that could be considered as amount of cash paid to the individual is considered under the taxable amount. Novikov, Ling and Kordzakhia (2014) stated that individual employees getting benefit from their employers are mainly considered as fringe benefit tax which is paid by the employer.

The situation mainly states that relevant fund is being returned to the Canoe Club Members, as excess money was being collected. This return of money from the Canoe Club is mainly a refund and cannot be considered as an income of the members. As per the Australian taxation law, any kind of expenses that are conducted on clubs for personal entertainment are not deductible in nature (Davis et al. 2015). Therefore, the overall return of funds cannot be displayed as an additional income received by the members of Canoe Club. Thus, under the taxation law of Australia, the return of funds will not be considered under the taxable income of the Canoe Club members.

Amounts received by a crane hire company for a damaged crane

Television Company has directly paid a sports person for participating in the sports field honestly, under the circumstances the sportsperson is liable to add the money in its taxable income. This situation is mainly stated under the Taxation Ruling TR 1999/17, where it is depicted that any kind of benefits that is obtained by a sports person in Australia will directly be considered as taxable income. Therefore according to the ruling the sport person has to include the benefits provided by the television company in its taxable income and relevant access to the Australian government. Petty et al. (2015) stated that taxation measure is mainly used in reducing any kind of unethical measures conducted by an individual to reduce taxable income.

The situation many states that overall expenses are been conducted in the building, where relevant expenses is been considered from the apprentice. In accordance with the Australian taxation law, the situation mainly states that apprentice is directly considered under the compensation of building labour. The measures that are used in identifying the expenses of building are depicted under the taxation ruling of TR 95/22, where relevant expenses and compensation are directly disclosed. According to the taxation rule relevant expenses needs to be considered before identifying the apprentice as a building employee (Ross, Walker and Walker 2017). The first measure mainly states that construction site is considered when a supervisor work is being conducted on the premises. The second measure states that labours were employed for building the premises is considered to be an employee. The third measure states that relevant trainees, apprentice, and carpenters are considered under the employed labours. Moreover, a construction site is also considered where project manager is employed for completing and conducting relevant measures for the construction of the building.

Thus, from the evaluation it could be understood that expenses conducted on apprentice is considered as an labour compensation for the building and can be deducted in the annual report.

Expenses is been conducted on short term course for becoming an art director, which has a relevant provisions in the Australian taxation office. Short course that is used by an individual to enhance his career in the short time is mainly considered to be tax deductible expense. This type of tax deductible expense is only considered when the study courses is short, for long study courses there is no exceptions in the taxable income. Moreover relevant measures as depicted by the Australian taxation office need to be evaluated by the taxable person (Taylor and Richardson 2013). Then relevant education module and software for the course needs to be used. In addition, fees for the course need to be for short duration have relevant meals and travel expenses should be included. These measures are provided by Australian taxation office needs to be evaluated before using the short term course, as a tax deductible expense. Therefore, relevant tax deduction is conducted by the art director, which helps in reducing the taxable income.

There are relevant expenses conducted on both makeup and dresses on an individual, which is a deductible in nature as mentioned by the Australian taxation office. However, there are certain criteria, which need to be satisfied before allowing the expenses to be tax deductible. The expenses conducted on Makeup and dresses for the performing artist are mainly deductible in nature (Saad 2014). Moreover, performing artist is considered to be a magician, singer, actor, Circus performer, variety artist, and a dancer. Any kind of expenses conducted on these individuals are considered to be a tax deduction expense. Therefore, the scenario states that relevant expenses are conducted on makeup and dresses, but no disclosure is provided regarding on whom the expenses are conducted. Hence, relevant assumptions are made that the expenditure are conducted on performing artist, which could be deductible from the taxable income and allow the individual to reduce the tax payable.

Free overseas holiday received by a nightclub manager

Expenses conducted by the individual by travelling from home to workplace, Is mainly considered to be an activity of work. However there is no clear evidence provided in the scenario which could help in identifying the legality, where expenses are conducted for office purposes. The Australian taxation office mainly states that any kind of expenses conducted by an individual for the purpose of office is deductible in nature from its taxable income. However, any kind of motive rather than office expenses is not deductible under the taxation law in this particular scenario. Thus, the individual needs to identify actual expense motive before using it as taxable deductions. Cao et al. (2015) argued that without adequate monitoring there is no way where government could identify the expense conducted by individuals in their income tax file. Hence, it could be stated that if the expenses conducted for office purposes then it could be deducted from the taxable income. Nevertheless, this will not reduce if the expenses are conducted for personal use.

The situation mainly states that relevant expenses are been conducted by an individual from travelling to one employee to another. This mainly states that the individual is conducting personal expense and travelling from one place to another in search of job, as one individual cannot be employed by two companies. Therefore it could be understood that this type of travel expense is a personal endeavour, which cannot be deducted from the taxable income. According to the Australian taxation law, the individual cannot deduct the expenses from its taxable income. Braithwaite (2017) mentioned that with the help of laws provided by the Australian taxation authority, the Australian government is mainly able to reduce the overall tax evasion conducted by individual. Therefore it could be understood that the expenses conducted by the individual on travel from one employee to another is not deductible in nature, which could not reduce its overall taxable income.

Determination of the overall Tax of Manpreet could be identified with the help of the above table, where relevant calculations are conducted for identifying the total taxable amount. Manpreet has been living in Australia for more than 6 months, which directly makes her a citizen of Australia liable to pay individual tax according to the Australian taxation board. Moreover there are certain expenses that are conducted by Manpreet while living in Australia (Exfin.com 2017). Expenses related to studying and computer buying, which does not come under any kind of tax exemption that could be used in reducing the taxable amount. In addition, Manpreet has also earned around $45,000 in Australia in the current 2016-17 fiscal year. This has mainly mandated Manpreet to pay the income tax in Australia. Furthermore, there is relevant income from a trust fund is also received by Manpreet, which is directly included in taxable income. However, relevant tax is paid by Manpreet for getting the trust amount in Australia, which is not deductible in Australian taxation method. This is mainly because there is no treaty between Australia and India, where double taxation could be avoided by the citizens. The only deduction that was allowed in the taxable amount is the purchase of new mobile phone which was for work purposes (Barkoczy 2016).

Return of excess funds raised by a canoe club

The overall section 8-1 of the Income Tax Assessment Act mainly guides in identifying the actual taxable income of Manpreet, which needs to be paid to the Australian government. Moreover, cases such as Ronpibon Tin NL v. FC of T (1949), Lunney v. FC of T; Hayley v. FC of T (1958) 100 CLR 478; (1958) and FC of T v. M I Roberts 92 ATC 4787 could be used as an example for identifying the actual taxable income of Manpreet.  these cases also help in gauging into the overall taxation rules that is followed in Australia and the relevant amendments that needs to be conducted in the taxable amount. Moreover medical navy and low income tax for state is also used in the calculation of total tax payable of Manpreet, which is promptly disclosed in the Australian taxation Office website (Ato.gov.au 2017). Therefore medical leave is mainly added to the income tax amount, while the low income tax offset is deducted from the taxable amount. This mainly allows the individual to identify the actual tax payable in Australia, in accordance with the rules and regulations laid down by ATO (Snape and De 2016).

Reference and Bibliography:

Ali, M., Sales, A.B.I.C.L., Barwick, J., Digirolamo, L., Australia, C.R., Officer, D.R., Do, T.N., Supply, I.W.W., El Boustani, P., Sales, S.H.B.B.H. and Khalid, A., 2017. School of Business.

Ato.gov.au. (2017). Low income earners. [online] Available at: https://www.ato.gov.au/Individuals/Income-and-deductions/Offsets-and-rebates/Low-income-earners/ [Accessed 3 Sep. 2017].

Barkoczy, S., 2016. Foundations of Taxation Law 2016. OUP Catalogue.

Bird, R.M. and Zolt, E.M., 2014. Redistribution via taxation: the limited role of the personal income tax in developing countries. Annals of Economics and Finance, 15(2), pp.625-683.

Braithwaite, V. ed., 2017. Taxing democracy: Understanding tax avoidance and evasion. Routledge.

Burton, H.A. and Karlinsky, S., 2016. Tax professionals’ perception of large and mid-size business US tax law complexity. eJournal of Tax Research, 14(1), p.61.

Cao, L., Hosking, A., Kouparitsas, M., Mullaly, D., Rimmer, X., Shi, Q., Stark, W. and 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. and Williams, B.M., 2015. Do socially responsible firms pay more taxes?. The Accounting Review, 91(1), pp.47-68.

Davison, M., Monotti, A. and Wiseman, L., 2015. Australian intellectual property law. Cambridge University Press.

Douglas, H., Bartlett, F., Luker, T. and Hunter, R. eds., 2014. Australian feminist judgments: Righting and rewriting law. Bloomsbury Publishing.

Exfin.com. (2017). Current Australian IncomeTax Rates – Resident and Non-Resident | Exfin – The Australian Expatriate’s Gateway. [online] Available at: https://www.exfin.com/australian-tax-rates [Accessed 3 Sep. 2017].

Lang, M., 2014. Introduction to the law of double taxation conventions. Linde Verlag GmbH.

Novikov, A.A., Ling, T.G. and Kordzakhia, N., 2014. Pricing of volume-weighted average options: Analytical approximations and numerical results. In Inspired by Finance (pp. 461-474). Springer International Publishing.

Petty, J.W., Titman, S., Keown, A.J., Martin, P., Martin, J.D. and Burrow, M., 2015. Financial management: Principles and applications. Pearson Higher Education AU.

Ross, M., Walker, J. and Walker, J., 2017. Multinationals targeted down under. Taxation in Australia, 52(1), p.22.

Saad, N., 2014. Tax knowledge, tax complexity and tax compliance: Taxpayers’ view. Procedia-Social and Behavioral Sciences, 109, pp.1069-1075.

Snape, J. and De Souza, J., 2016. Environmental taxation law: policy, contexts and practice. Routledge.

Taylor, G. and Richardson, G., 2013. The determinants of thinly capitalized tax avoidance structures: Evidence from Australian firms. Journal of International Accounting, Auditing and Taxation, 22(1), pp.12-25.

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