Student Number: (enter on the line below) Student Name: (enter on the line below) HA3042 TAXATION LAW final assessmeNt Trimester 3, 2021 Assessment Weight: 50 total marks Instructions: · All...

ACCOUNTING QUESTIONS – TAXATION LAW
Ans 1.
Most of Overseas companies wishing to commence business operation in Australia do it through wholly or partly owned subsidiary or establishing
anch office of their company headquartered elsewhere.
Ronal is Canadian company executive who has come to Australia with his wife to set up
anch office of his company. Although tenure of his stay is uncertain but he has initially leased
ented family home in Brisbane for 12months. His income are rental income from property in UK and Interest on investment in France. But due to ill-health he had to cut short his stay and leave Australia in 11 months (a month before lease expires).
All non-resident entering Australia must mandatorily comply with statutory test prescribed by Australian Tax office to determine their Tax residency as below:
Residency Test – This includes following
Resides Test –
This is the primary test to determine the status of Non-resident tax residency in Australia. If someone’s is residing in Australia he is considered and Australian resident for tax purposes and no further application of any other test is required for determining tax residency .The critical factors considered to determine residency status here are :
· Physical Presence of Individual
· Intention and Purpose of stay of Individual
· Whether Family staying with individual
· Business or Employment ties of individual
· Social and Living A
angement of individual
It’s pertinent to mention that if an individual fails this primary test, he will still be considered an Australian provided he meets criteria specified in other 3 statutory test.
Domicile Test –
This test determines that you are Australian Resident if your domicile (i.e. a place of your permanent residence or home) has been Australia, unless and until there is anything contrary to suggests that the permanent place of abode/home is outside Australia. Hence to prove this there are further 2 steps test to confirm domicile:
Assess the domicile:
· If not cu
ently in Australia, domicile test not satisfied.
· But if cu
ently in Australia, fulfil condition in step 2.
· Determination of permanent place of home
· If not cu
ently in Australia, domicile test not satisfied.
· If in Australia, considered Australian resident for Income Tax Purposes.
· Under the law a place may be considered domicile either by origin (i.e. by birth) or by choice (both change of residence and intention to make change of residence permanent or at least indefinite) and lastly by operation of law as imposed by Law.
· Domicile test usually applies when Australian resident is frequently travelling to overseas country for work for extended period. One of the things may occur such as
· Individual may fail reside test since he is away from permanent abode for lengthy period
· It is assumed that one will be away for such long period, hence he will have alternative form of abode in that country as well
· Unless strong family and Financial ties in Australia to pull back, it is safe to assume that one does not reside in Australia.
183 day Test – This is another statutory test applicable to person entering a
iving in Australia. As per this test you are counted as resident if are actually present in country for more than ½ income year (continuously or in
eaks), thereby implying that you have constructive evidence in this country unless it is proven that:
· Usual place of abode is outside the boundary of Australia –Not to be confused with permanent place of abode, but merely implies habitual, customary.
· No intention whatsoever to take residence in Australia.
· Kindly note that 183 day test is pertinent in relation to year of taxable income not calendar year.
The Super annuation test –
This is the last test in series. It’s applicable to Australian government employees deployed at Australian position overseas and member of CSS (Commonwealth Superannuation Scheme) or PSS scheme. You are counted as Australian resident if contributing member of:
· PSS scheme
· CSS scheme
· Further test does not apply if already member of PSS Scheme.
Ans 2
GST in Australia applies on majority of goods and services sold in Australia. There is standard rate of 10 % GST tax applicable on most of goods, services and other various items transacted or consumed in Australia. Every entity registered for GST will necessarily have to collect this tax from customer and deposit it in Australia Tax office.
The following is the condition and rules regarding the applicability of GST to various entities or individuals:
Business or Enterprise touches GST turnover threshold of $ 75,000 or more .For this purpose GST turnover is Total business income (not the profit) all business (-):
GST sales billed to custome
Sales which are GST exempt and not for payment.
Sales not related to business in question
Input taxed sales achieved
Sales not made in Australia
In the first year of operation business is expected to touch GST turnover threshold.
Existing business and have touched the GST threshold.
For non-profit organization GST Turnover threshold is >= $ 1, 50,000 per annum.
Providing taxi or limousines travel rental service to passenger (incl. ride sourcing). Applicable i
espective of GST turnover threshold.
For business claiming fuel tax credits for business or enterprise purposes.
Modus operandi of GST turnover Threshold:
· Cu
ent GST turnover (i.e. turnover for cu
ent month + prior 11 month) totals >= $ 75,000 ($1, 50,000 in case of non-profit organization)
· Projected GST turnover (i.e. Cu
ent Turnover + next 11 months) likely to reach >= $75,000 ($1, 50,000 or more in case of non-profit organization).
· Further act states that if the cu
ent GST turnover is >= threshold registration is not mandatory if projected GST turnover < threshold.
If the business does not fulfil any of the above listed 6 criteria then GST Registration is optional .But if entity chooses to register still, then...