Domicile Test
Question:
Discuss about the Determinants of Transfer Pricing Aggressiveness.
It is necessary to understand the fact on matters relating to residential status of Kit. Kit is a permanent occupant in Australia but he was born in Chile. IT was clearly mentioned in the case that he does not have Australian citizen irrespective of the fact that he resides in Australia permanently (Woellner et al. 2016). IT Ruling 260 under ITAA 1977 reveals the fact that income that is obtained or generated from the Australian inhabitant needs to be held for assortment as well as extracted from other nationwide sources.
Domicile Test- Domicile test is one of the test that will help in answering the case study question and arriving at the conclusion at the end. This particular test can be easily documented as a legal representation that assist at the time of undertaking decisions for getting information on matters relating to current residential status of an individual (Snape and De Souza 2016). Adding to the test, it can be understood that Domicile test is used for residential test that is carry out based on the laws as well as rules as represent as stated in the Domicile Act in the year 1982.
183 Test- 183 tests is one of the tests that will help in answering the case study question and arriving at the conclusion at the end. This particular test explains that fact that if an individual stay without any break for more than half of the year, then that individual is treated as a resident of Australia. It can be understood from the above-mentioned case that Kit has lived more than half of the year in Australia that makes him as an Australian citizen. It is clearly mentioned in the standard such as “F .C. of T. v. Applegate (79 ATC 4307; (1979) 9 ATR 899”, where individuals dwells in Australia for particular period and reveals that fact that people who is the resident of the country (Richardson, Taylor and Lanis 2013).
Income Tax Assessment – Income Tax Assessment is one of the assessments that will help in answering the case study question and arriving at the conclusion at the end. It can be understood from the above-mentioned case that that a person is accountable for paying tax when it has appropriate proof that is found regarding the nationality situation. It is clearly mentioned in the act such as “Applegate per Franki J 79 ATC” where it explains that Kit is a resident of Australia and need providing all his income both in overseas and home state when he will be filing for income tax return (Richardson, Taylor and Lanis 2013).
It can be understood from the above-mentioned case that the problem lies that are faced by California copper Syndicate Limited that has disposable property that is oppressed for minerals. Adding to the above case, the outcome of the case affects assets that are voluntarily obtainable for testing period that is not declared for having adequate finances. The verdict of the court explains on matters that is related to any profits that are accessible and taken by person or in that case individual comes under the heading possible income (Petty et al. 2015).
183 Test
It can be understood from the above-mentioned case that that sufficient profits of trade and subdivision where it is achieve from the sale of land where it is measured for assessing with the supplies. Adding to the above case, it is easy to understand the fact that any proceeds established from sale of land can be assessable as state by the Australian tax authorities (Pearce and Pinto 2015). The verdict of the court state the fact on matters relating to any commercial movement can be used for selling the land that is treated as understanding of assets resources and given activity for selling that comes under recognition of capital assets.
It can be understood from the above-mentioned case that on matters to a situation on whether the cash construct from sale of land is resources in practical course of action. Adding to the above statement, the taxpayer cash depict that any understanding of possessions and income not be help in assessment value. The above considers as one of the popular cases that are Mason, Morphy and Wilson mainly depicts that under section 25 (1) any profits generated from sale of property needs to be held by pertinent person. The verdict was provided by the court when announcement is made that include of some presentation at this to be executed by people (Michel 2016). After studying the case, it is clear to state the fact where the overall verdict mainly provided by the court situation that income must be calculate in form of taxpayer’s proven income fulfilment with financial statement coverage.
It can be understood from the above-mentioned case that profits obtained from sale of subdivided property needs to be experimental as mentioned in the section 25 or 26. It is understood that the case may require to be measured where proceeds from sale of possessions due to loss that is acquired in deal is quantifiable. The verdict was made by the court on matters relating to situation where lost in farming trade led to the sale of property, that did not unwillingly indicate that considerate offer, turn into quantifiable. It is thereby noted that the property needs to be measured where the comprehensive scale will be presented in agreement with nature of land at the same time (Davis et al. 2015).
It can be understood from the above-mentioned case that entire changes in tax that it require to be paid by the taxpayer based on the subdivisions of an old property and selling them individually on different occasions. The verdict that was provided by the court, the court specifies that representative from the sale of entity blocks are measured under normal income and convenience under the heading land subdivision. Therefore, it is necessary to represent the understanding of resources possessions and taxpayer that are not approved from the given business subdivision (Cao et al. 2015).
It can be understood from the above-mentioned case that principle of land does not have to be profitable concern that if it is purchased for income creation reason. The verdict that was provided by the court explains on matters relating to obligatory that was either to sell the land that is based on proceeds in agreement with ordinary conception. It reveals the situation when individuals acquire possessions that makes proceeds hat need to pay added tax in agreement with ordinary theory that depends largely on profits from the sale of earnings (Bird and Zolt 2014). It is thereby required for an individual to look at the profits that are assessable and imbursement of pertinent taxes.
Related Court Cases
It can be understood from the above-mentioned case that earlier land was obtained for the purpose of farming activities for the time span of 2 years where the land is subdivided in different blocks at an income. For adding the case, it was even noted that increases revenue of the possessor. The verdict was provided by the court on matters relating to profit when there is sale of possessions till the income can be easily obtained. It was stated by the court that the dealings that are used for solving the normal course of activities that had been developed the land and augmented productivity from the profits of sales (Barkoczy 2017).
It can be understood from the above-mentioned case that individuals are accountable for changing or in that way converting their old house into a new house for the reason of escalating the gains from profits of sales. Nevertheless, the verdict was provided by the court on a situation where taxpayers grant tax on all connected sale profits at the time of sale of new properties after improving over the old ones. The matter was regarding the old property that was not yet held independently for the profitable use and increase in profits from the takings of sale. It is thereby need to consider the fact when taxpayers has the intention to enter properly into the commercial activities for emergent the possessions and selling the same to other individuals (Aktaev et al. 2015).
Reference List
Aktaev, N.E., Bannova, K.A., Balandina, A.S., Dolgih, I.N., Pokrovskaia, N.V., Rumina, U.A., Zhdanova, A.B. and Akhmadeev, K.N., 2015. Optimization criteria for entry into the consolidated group of taxpayers in order to create an effective tax mechanism and improve the social, economic development of regions in the Russian Federation. Procedia-Social and Behavioral Sciences, 166, pp.30-35.
Barkoczy, S., 2017. Foundations of Taxation Law 2017. 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.
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.
Michel, J., 2016. Administrative judge control over the activities of the tax administration: between the need for taxation and protection of tax payers. Zbornik radova Pravnog fakulteta u Splitu, 53(1), pp.57-66.
Pearce, P. and Pinto, D., 2015. An evaluation of the case for a congestion tax in Australia. Tax Specialist, 18(4), p.146.
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.
Richardson, G., Taylor, G. and Lanis, R., 2013. Determinants of transfer pricing aggressiveness: Empirical evidence from Australian firms. Journal of Contemporary Accounting & Economics, 9(2), pp.136-150.
Richardson, G., Taylor, G. and Lanis, R., 2013. The impact of board of director oversight characteristics on corporate tax aggressiveness: An empirical analysis. Journal of Accounting and Public Policy, 32(3), pp.68-88.
Snape, J. and De Souza, J., 2016. Environmental taxation law: policy, contexts and practice. Routledge.
Woellner, R., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D., 2016. Australian Taxation Law 2016. OUP Catalogue.
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