Nobody downloaded yet

Taxation Law: Set of Legislations - Essay Example

Comments (0) Cite this document
An essay "Taxation Law: Set of Legislations" outlines that most of the countries fund their operations from revenues collected through taxation. This tax is imposed on various activities undertaken by the citizens of the state and among the category of this source of tax is the income tax…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER92.7% of users find it useful
Taxation Law: Set of Legislations
Read TextPreview

Extract of sample "Taxation Law: Set of Legislations"

Download file to see previous pages The case under study, therefore, seeks to discuss in details all the legal aspects of income tax and the taxation structure that affects this type of tax. To give a comprehensive understanding of this, hypothetical values have been provided to help in presenting a practical application of this type of income tax. Income Tax Principles Stephanie receives annual earnings of $25,000 with the Medical Registrations Board. Over the same period, her annual expenditures are; dry-cleaning- $200, uniform replacement cost- $800, traveling- $1000, books and study cost- $2000, and HECS-HELP debt $20,000 (Black, 2011). Besides, her annual expenditure on accommodation was estimated to be $15000, on condition that she does not lease out the house or stay with someone in the flats. The above financial conditions will attract income tax policy mechanisms according to the state taxation principles. Income tax is payable by individuals, entities, and trustees annually based on the financial position of the corporation or individual. However, the state through the tax regulatory authority outlines in principle that only income attracts taxation.  Income tax = [Taxable Income * Tax Rate] - Tax Offsets The Tax Liability to be met by an individual is outlined by the formula: Tax Liability = income tax + Medicare levy + Medicare levy surcharge + HELP Repayment In the case of Stephanie, her taxable income is: $[25,000-(200+800+1,000+2,000) = $21,000] $21,000 - $15,000 = $6,000 Tax liability would be equivalent to; $6,000 + $20,000 = $26,000 Income tax has stipulations which give a guideline on how the taxation is carried out. In this case, the predicament of Stephanie presents a unique situation which needs careful deliberation. According to the Australian taxation law, the valued income tax influences the amount of tax that would be levied on any income earner. As noted in the case of Stephanie, it is arguable and evident that the amount of income tax that she earns is less when compared to the amount of tax that is supposed to be deducted. The uniqueness of this calls for careful deliberation based on legal taxation proceedings (Black, 2011). This is what the following part seeks to explore. Where personal incomes are less than the deductions, the income tax liability is not payable on individual income and instead may be deferred to the next financial year. However, in her case, her incomes exceed the summation of deductions and thus attracting taxation within the same financial year. The sample principle applies to entities and corporate institutions in the event they make losses. Such losses imply tax loss which would be carried forward as deductions in the coming financial periods. Assessable income that attracts tax liability is classified as either ordinary or statutory incomes. Ordinary incomes are defined by the common law as sources of income either from salary, interest or rent. On the other hand, statutory incomes are incomes that are included in the assessable income tax checklist, ITAA97.the law classifies the following under this category; annuities, work in progress, dividends, capital gains, and franking credits. In our hypothetical case study of Stephanie, it is clear that she has no statutory income as her income is specifically earnings generated at her workplaces with no other sources of income. ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Taxation Law Essay Example | Topics and Well Written Essays - 2250 words”, n.d.)
Retrieved from
(Taxation Law Essay Example | Topics and Well Written Essays - 2250 Words)
“Taxation Law Essay Example | Topics and Well Written Essays - 2250 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Taxation Law: Set of Legislations

Australian taxation law

...? [Manager] 28 May AUSTRALIAN TAXATION LAW The fringe benefits tax liability of Chatswood Pty Ltd for the year ended 31 March 2011, shall be based on the ‘Higher gross-up formula (type 1), which means that the higher gross-up formula was introduced to avoid allowing employers the benefit of GST credits for goods and services purchased for the private use of employees. The higher gross-up rate effectively recovers the GST credit you can obtain in providing a fringe benefit. The following formula is used to calculate the higher gross-up rate:’1. Type 1 FBT rate + GST rate aggregate fringe x ______________________________ benefits amount (1 – FBT rate) ? (1+GST rate) ? FBT rate Hence, the following benefits...
8 Pages(2000 words)Assignment

Assessment for Taxation Law

...?Assessment for Taxation Law Introduction This case involves two companies, which had entered into a contract, which was later terminated and damagesof $400,000 paid outside court litigation, as a way of compensation. The amount paid to Nutra Tech Pty Ltd is paid in lump sum. Generally, lump sum amounts are not subjected to income tax assessment, because they are considered not income in nature. Furthermore, such amounts are not subjected to capital gain tax if they fall under certain class which is exempted. Nonetheless, lump sum amount is taxable if its purpose is to reimburse not more than a loss of income. A lump sum is subjected to tax on the extent to which it is quantifiable and identifiable as...
4 Pages(1000 words)Assignment

Law of Business Taxation

...forms. The ITTOAI 2005 helps companies or enterprises gain a more straightforward process of filing their incomes by simplifying deductibles and what may be considered taxable activities as well as allowable expenses that can be deducted. References: ACCA. 2012. Income from Property. Technical Factsheet 139. American Leaf Blending Co. SDN BHD v Director-General of Inland Revenue (1979) (AC676). James, Malcolm. 2011. Taxation of Small Businesses. Spiramus Press. James Waldie & Sons v IRC (1919) (12 TC 113) Rhodesia Railways Ltd v Collector of Tax of the Bechuanaland Protectorate (1933) (AC 368) Highland Railway Co v Balderston (1889) (2 TC 485) Law Shipping Co Ltd v IRC (1923) (12 TC 671) Copeman v...
5 Pages(1250 words)Essay

Australian taxation law

...+ PART A EXPLAIN briefly and VALI by reference to appropriate sections of ITAA 97 andappropriate Case Law as to whether the individuals listed below are residents of Australia for taxation purposes For an individual to qualify to be an Australian resident for taxation purpose, that person must have lived in Australian for the entire life or have moved in to stay in Australia. Further, one can also become a resident after being in Australia for more than half of the income year and if he/she is an overseas student who enrols to study a course lasting for more than six months. 1. An Indian IT consultant who accepts a four month contract of employment in Australia between January 2013 and...
4 Pages(1000 words)Assignment

Taxation law

...? TAXATION LAW MODULE This paper explains why the payment to the taxpayer in FCT v Dixon (1952) 86 CLR 540 was assessable income but the payment in Scott v FCT (1966) 117 CLR 514 was not. It also explains the tax position of an individual respective of the given scenario. Furthermore, it provides cases and other sources of law or information that may apply while taking the given situation in consideration. Keywords: Assessable income, tax position PART A The 2 cases concerned in the current situation are Federal Commissioner for Taxation v Dixon and Scott v Federal Commissioner for Taxation. The main issue that arises is the income tax being payable in...
8 Pages(2000 words)Essay

Taxation Law

...legislation imposing taxes and excise (other than customs duty). It also works with appropriate departments on policy matters relating to tax and excise. The ATO has the responsibility for administering a range of tax and superannuation legislation is vested by Parliament in the Commissioner of Taxation. The Commissioner's authority to administer each levy is written into the law relating to that levy, as are his general responsibilities, discretionary powers and rights (The Commissioner of Taxation, (n.d.), accessed 25.10.05). In Australia, the Tax Office generally asks the taxpayers to co-operate with it voluntarily and to disclose full information...
20 Pages(5000 words)Essay

Taxation Law Practice

...of the Australian senate. As section 53 limits the power of the senate to reject taxation bills, this section prevents the House of Representatives attempting to line on other issues. This section explains why Australian tax law is made up of several pieces of legislation (2007). Sections 53 and Sections 55 prescribe procedural limitations on tax legislation. Section 96 of the Australian Constitution This provides the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit Therefore, the States Grant Act placed the 'term and condition' that states did not tax at all as a pre-requisite to funding. The Income...
9 Pages(2250 words)Essay

Taxation Law Assignment decided in the decision ATO ID 2001/78, which reiterated the provisions in the Taxation Laws Amendment Bill No 3 of 1993 (Act No.98 of 1992) re-affirming Division 10D of the Income Tax Assessment Act 1936, where any earthworks, such as removal in the Mulga Council case that affect the usefulness of land are not to be treated as integral to the construction of a structure : The filled in land, although improved, was not in itself a 'structural improvement' in the ordinary sense of the term. Also, the filled in land was not integral with the structure subsequently constructed on that land, as the improved land was merely land on which almost any type of construction could have occurred (ATO ID...
10 Pages(2500 words)Essay

Principles of Taxation Law

...of trusts the rules for the carry forward of business losses are complex in nature and the Taxation Laws Amendment (Trust Loss and Other Deductions) Act 1998 governs the provisions relating to the carry forward and set off of business losses by the business trusts. Under Section 265-5 "If there is a change in ownership or control of a trust or an abnormal trading in its units, it: * may be prevented from deducting its tax losses of earlier income years; and * may have to work out in a special way its net income and tax loss for the income year; and * may be prevented from deducting certain amounts in respect of debts incurred in the income year or earlier income years."8 However...
7 Pages(1750 words)Case Study

Taxation Law

.... These benefits are those that self-employed do not enjoy. On the other hand, individuals who are employed do not have the opportunities such as setting their work related expenditure against tax. In Lee Tin Sang v Chung Chi-Kueung5 the plaintiff became injured whilst working. He sued for damages under the Employees’ Compensation Ordinance. It was necessary that the courts determine if he was an employee or working under a contract of service. The judge held that he was an employee, and he recovered damages. Sebastian also works from home and incurs considerable overhead cost for services such as light/heat, phone and others. The fact that he pays for all the services he obtained shows that he is...
8 Pages(2000 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Taxation Law: Set of Legislations for FREE!

Contact Us