TLAW303 Taxation Law Assignment Help

TLAW303 Taxation Law Assignment Help

TLAW303 Taxation Law Assignment Help

Introduction

The legal guidelines as quoted by the taxation law of Australia state according to the duty levied on an individual or a professional attached with a corporate organization based on the income of the concerned individual. Alteration in this duty   has enabled the administrative body of Australia to execute its duties in a more effective manner. Furthermore, the tax that is a source of revenue generation for the concerned government that is subsequently utilized in the future developmental works of the concerned country (Xynas, 2011),. Hence in compliant with the task requirement a sincere initiative shall be undertaken to develop a report discussing the questions. The author shall focus on addressing the given question that is primarily inclined towards the legal aspects of taxation law of Australia. Important to mention the taxable income of diverse case studies shall also be included within the said report.

TLAW303 Taxation Law Assignment Help

Question 1- Calculation of income tax payable for various tax payers for the year ended 30 June 2016 by ignoring Medicare levy.

The income of An individual RESIDING IN Australia with An income of $15,000 fall in the category of taxable INCOME

In the table presented below the interest rate for income tax levied for the financial year 2015-2016 is given important to highlight that the table produced below has excluded 2% Medicare tax.

Slab rate 

Income slab for the purpose of tax (Amount in AUD)

Tax charged

1-18,200

-

18,201-37,000

19 % for above $ 18200

37,00,-87,000

3572+32.5% for above 37,000

87,001- 180,000

$ 17547 + 37 % for above $ 80000

181,001 and above

$ 54232 + 45 % for above $ 180000

In accordance to the given slab rate, an earning individual with an income within the range of $1-$18,200 becomes taxable and nil rate of duty becomes chargeable. hence the taxable amount for this particular income slab is nil due to the fact that exemption is available for the individual  with this particular income slab. (SAAd, 2011)

A NON-RESIDENT Individual of Australia with a Taxable INCOME OF $15,000

Slab rate and provisions are evident to vary effectively in case of the professionals who are not citizens of this country. the table presented below shall depict the tax rate applicable for the non-resident people of australi earning $15,000. the tax rate presented for given for the financial year 2015-2016.

Income slab for the purpose of tax (Amount in AUD)

Tax charged

1-80,000

32.5% above one dollar

80,001-180,000

26,000 +37% for above $ 80,000

180,001 and above

63,000 +45% above 180,000 with every $1

The information provided in the table above shall aid in deciding the tax charged to the individual who are non-resident to australia and working in the said country. the tax charged  shall be

- $15,000*32.5%

Tax charged = $ 4,875

The amount chargeable to the non-residents of aUSTRAlia will be $ 4,875.

THE calculation presented below for an australian organiation  with a taxable income of $15,000.

Flat 30% is the percentage of tax rate chargeable by the govenrment of australia for the category of corporate tax. hence corporation of australia are applicable to this tax rate. 28.5% tax rate is with effect from 1st july, 2015 and is imposed to those business organizations of australia with an annual business turnover less than $2 million. hence in accordance to the tax charged for the business organization with an taxable income of $15,000 is calculated below:

Tax charged= $15,000*28.5%

The chargeable Amount of taX = $ 4275

Hence, the payable amount aPPLICAble to An  Australian company is $ 4275.

tax caluculated for an individual who is a resifent of australia and earning $155,000 which falls within the taxable income  category

below presented  the slab rate for the financial year of 2016 and 2017. 

Income slab for the purpose of tax (Amount in AUD)

Tax charged (Amount in AUD)

1-18,200

-

18,201-37,000

19 % for above $ 18200

37,00,-87,000

3572+32.5% for above 37,000

87,001- 180,000

17547 + 37 % for above 80000

181,001 and above

 54232 + 45 % for above 180000

Below is presented that amount charged as taxable for an individual who is a resident of the said country  and with an income of $155,000. the slab rate for this particular category of income which is taxable is 87,001-180,000. hence the tax chargeable in this context is :

Tax charged= 17,547 + 37% (155,000-80,000)

Tax charged= $17, 457+ $27, 750

Tax charged= $ 45297.

HENCE, the tax charged for the PERSON who is a resident of aUSTRAlia will be $ 45297.

tax chargeable for an individual who is non-resident to australia and have an income of $155,000 which is taxable

considering the case of non-resident individuals residing in australia having  a taxable income of $155,000 shall be included under the slab rate of $80,001-$180,000. hence, accordingly, there amount charged has been calculated below-

Income slab for the purpose of tax (Amount in AUD)

Tax charged (Amount in AUD)

80,001-180,000

26,000 +37% for above $ 80,000

Tax charged= 26,000+ 37% ($155,000-$80,000)

Tax charged= $26,000+ $27, 750

Tax charged= $ 53750.

Therefore the amount chargeable for the professional who is an australian non-resident will be $ 53750. This concerned individual is entitled  to pay the calculated amount within a given  time period (Mirrlees and Adam, 2010).

Tax chargeale for a business organization of australia origin having an income of $155,000 which is obviously within the taxable category.

Referring to the point produced above it  can be stated that the taxation rate for the business organization of Australia origin with the limit of $2 million is 28.5%. This particular interest  rate is the flat rate that is chargeable to all the business organization operational within the said  country. Hence in accordance to the given question the taxable income of the individual is $ 155, 000. hence the tax this particular individual should pay is calculated below: 

Tax charged= $155,000*28.5%

Tax charged= $ 44,175

Hence the amount which is needed to be paid by the said Australian business organization is $ 44,175. Important to mention it is mandatory for every Australian company to pay this particular amount within the stipulated time frame as mentioned in the taxation law of australia.  However 30% tax rate will not be prevalent as a result of the amendment in the act related with the tax law of Australia. According to the amendment given which is effective from july, 2015, 28.5% rate will be applicable for the business organizations of Australia  with turnover of less than $ 2 million.

An Australian professional  who is residing in the said  country  with a taxable income of $255,000.

in complaint with the income stated in the above mentioned point, the slab rate is fixed according to the income tax rate which is specific for Australia. Hence calculations are presented below according to this particular slab rate.  

Income slab for the purpose of tax (Amount in AUD)

Tax charged (Amount in AUD)

181,001 and above

 54232 + 45 % for above  180000

Tax charged= $54,232+ 45% (255,000-180,000)

Tax charged= $ 54,232 + $ 33,750

Tax charged= $ 87982

Therefore referring to the above produced calculation it is justified to state that, the amount which is required to be paid by a professional who is a resident of australia for the taxable income of $ 255,000 is $ 87982. Furthermore this particular tax charged is mandatory for the concerned individual to pay within a specific time frame.

Tax calculation for an Australian individual who belong to a category of non-resident Australian with a taxable income of $255,000

Calculations presented below indicate that tax charged for the non-resident individual of Australia with the taxable income is $ 255,000. The slab rate has also been mentioned.

Income slab for the purpose of tax (Amount in AUD)

Tax charged

180,001 and above

63,000 +45% above 180,000 with every $1

Tax charged= 63,000+ 45% (255,000-180,000)

Tax charged= $ 63,000+ $ 33,750

Tax charged= $ 96,750.

With reference to the above produced calculation it can be stated that considering the case of non-resident of Australia it is applicable  to pay $ 96,750 as a tax which is chargeable  to the individual falling under this above said category. Similar to the above mentioned cases, it is mandatory for the concerned individual to pay this  tax amount within a definite time period failing which shall be considered as a legal offence.  however no exemption is allotted in such case (woellner et.al, 2011).

 Tax calculated for a business organization of Australian origin with an income of $255,000 which is taxable

Considering the case of an Australian origin company, the tax charged to such a business organization having an annual turnover of less than $ 2 million is 28.5%. This particular  rate is the flat rate and is also mandatory for the concerned company to  pay to the government of Australia within the stipulated time period in appropriate manner. Hence, the tax charged for the business           falling in this particular category  will be-

Tax charged= $ 255,000*28.5%

Tax charged= $ 72,675

In reference to the calculation performed above, it can be observed that company entitled to pay the required amount of tax which is $ 72,675. This calculated tax amount is charged with respect to the flat rate. Also this tax chargeable is  in alignment  with the provision of the financial year ending june 2016.

Tax calculation for a business organization of Australian origin that belong under the category of ‘small business entity’ having a taxable income of $100

Considering the above mentioned case, the tax applicable for the small business having an annual turnover of less than $ 2 million is 28.5%. Important to highlight this particular rate is mandatory to pay by such small business entities of Australia. Hence in accordance to the above mentioned calculated taxable amount,  the tax rate which is required to be paid for the small business entity of Australia will be same.  Furthermore no exemption limit has been prescribed in such cases. So, company would pay tax as follows-

Tax charged= $ 100* 28.5%

Tax charged= $ 28.5

The calculations produced above very clearly indicate the fact that business organizations of Australia falling under the category of small business entities are applicable to pay the calculated amount of tax to the Australian government which is with effective for the financial year ending 2016.

Question 2- Calculation of Medicare levy and Medicare levy surcharge in accordance with year ending June, 2016.

tax calculation for an Australian resident with an income of $18,000 and of age 25 years

Considering the above mentioned case both Medicare levy and Medicare levy surcharge shall be calculated with the help of ato. The table below has highlighted the important factors in this context.

Particulars

Amounts (in AUD)

Taxable incomes

18,000

Medicare levy

-

Medicare levy (surcharge)

-

Tax charged

0

Referring to the above mentioned facts and figures it can be stated  that, assess individual is not liable to pay the Medicare levy and Medicare levy surcharge for the year ending June, 2016 (ATO, 2016).

On assumptive grounds-

The concerned individual is not entitled for any of the pension and seniors tax exemption and benefit.

The individual do not have children Are Also applicable to this.

The unmarried person for the year ending June 2016

Taxable income is $ 32,000 for the person residing in australia with the senior tax offset.

Referring to the above produced situation, Medicare and Medicare surcharge will be applicable for it. Hence, it will be calculated for the senior individual with the taxable income of $ 32,000.

Particulars

Amounts (in AUD)

Taxable incomes

32,000

Medicare levy

-

Medicare levy (surcharge)

-

Tax charged

0

On Assumptive ground –

The individual is the senior person who is eligible for the offset of the seniors.

Individual has no spouse or the de facto.

The individual do not have children who be dependent on him in any manner.

Tax calculated for a person who is an Australian resident of age 45 years and with a taxable income of $45,0000

Referring to the above mentioned statement with respect to the taxable income of the concerned Australian resident and its medical levy and its surcharge has been calculated-

Particulars

Amounts (in AUD)

Taxable incomes

45,000

Medicare levy

2.46

Medicare levy (surcharge)

-

Tax charged

0

Hence in this case, the concerned subject individual is liable to make a payment of Medicare levy which is $ 2.46. Important to note this is mandatory for the concerned individual to pay for the year ending June, 2016.

Assumption-

Person is fully eligible for the senior and pension offset for the year ending.

Person does not have any children who are dependent on him in any manner.

Person is not married as well as there is no de-fecto.

Person is eligible for Medicare levy exemption for 365 days. 

Tax calculation for a non-resident Australia holding a taxable income of $45,000

In alignment with the above mentioned situation whereby an individual who is a non-resident of Australia and having an income of $45,000, type of duty is not changed. So this duty will not be calculated for them. Hence, in this case a non-resident individual of Australia with the income of $45,000 will not be charged in addition to the duties of Medicare levy as well as surcharge (Oats, 2012).

Tax calculation for an Australian business organization with an income of $2,500,000

Considering this particular case, the taxable income of the company would not be taken into consideration for the Medicare and Medicare surcharge. Important to mention that this particular type of duties and taxes are levied on the individual only. Hence the concerned Australian company is exempted from such type of limit.

Health insurance holder by the Australian residents aged 45 years with taxable income of $110,000.

Particulars

Amounts (in AUD)

Taxable incomes

45,000

Medicare levy

$110,000*2%= $ 2,200

Medicare levy (surcharge)

-

Assumption

Surcharge will not be considered due to availing of facility of private hospital.

No one is dependent on the individual.

The person is not married.

Individual comes under the slab rate of $ 90001 to $ 210,000 which is used for calculation of medical levy.

For an Australian individual of age 45 years along with a taxable income of $110,000 no health insurance is effective.

Particulars

Amounts (in AUD)

Taxable incomes

45,000

Medicare levy

$110,000*2%= $ 2,200

Medicare levy (surcharge)

$110,000*1.25%= $1375

Assumption

Assess is the not taking services of the private hospital.

He is supporting any one.

He do not have spouse.

Medical levy surcharge will be levied due to the fall in category of $ 90001 to $ 210,000.

Tax calculation for Health insurance for 90 days for the taxable income of $150,000 who is Australian resident

Particulars

Amounts (in AUD)

Taxable incomes

150,000

Medicare levy

$ 150,000*2%=3000

Medicare levy (surcharge)

$150,000*1.25%=1875

1875*{(365 – 90) / 365}=1412.67

Assumption

Medical levy surcharge falls in the category of $ 90001 to $ 210,000.

Assess is not providing support to the any person.

The concerned individual is not married or do not have de-facto.

Victor income is $110,000 and spouse income is $75,000 and there is no health insurance.

Particulars

Amounts (in AUD)

Taxable incomes

($110,000+$75000)= $185,000

Medicare levy

$185,000*2%= $3700

Medicare levy (surcharge)

$185,000*1.25%=$2187

Assumption

Incomes are assumed to be clubbed.

No individual is dependent on the assesse.

Assess is not taking services in Case of the private hospitals.

Absence of any private health insurance for the Australian couple having 4 or more children

 

Base tier

Tier 1

Tier 2

Tier 3

For family

$180,000 and less

$180,000-$210,000

$210,001-280,000

$281,000- above

Surcharge

0%

1%

1.25%

1.5%

Referring to above mentioned case, it is observed that Medicare levy has been calculated to $1500 with the birth of first child which will subsequently increase following  every birth of the child. Also, in this particular case, there is no health insurance is applicable and also  applicable for the couple has four children. So, there will be medical surcharge which is $4500.

Question 3

Case scenario- Rob is the resident of Australia who is employed in the services sector. His salary is $32,000 along with bank interest of $150. Deduction is present for clothing which is $450. Income which is deducted by employer of ROB is $2,600 in accordance with PAYG.

The table below present a calculation of income tax which is payable or refundable-

                                           Particulars

Amount in AUD

Income

 

  • Salary = $32000

 

  • Bank interest= $150

 

  • Deduction =$450

 

Total income

$31,700

 

 

Calculation of tax

 

Tax on total income (31,700-18200)*19%

$2565

Income tax effect

(445)

Tax payable

$2120

+ Medicare levy

$634

Tax payable

$2754

  • PAYG by source by employer

($2600)

Tax paid by assesse

$154

(Taylor and Richardson, 2012).

Facts and legal guidelines:

In accordance to the case scenario provided above it is evident that the concerned individual is a resident of Australia. Also the concerned subject is falling under the slab rate of $18,201- $37,000 wherein the income is the gross income of the assesse. For this above  mentioned reason, the  tax rate applicable for the concerned subject  will be 19% as the income is more than $18,000.

 Assumptions

Rob is the Australian resident which is also not minor with respect to his present age.

Medicare levy applicable for rob’s case is $634.

It is evident that the clubbed income with spouse does not exceed $150,000.

Question 4

Case scenario- Rafael is resident whose salary is $ 68,000 for the year ending 2015. Franked dividend is $2000 and unfranked dividend is $1000. TDS (Tax deduction at source) is 15,100. Semi franked dividend is $900.

Franking credit= income by dividend received / (1 – tax rate on companies) — income by dividend received (Minney, 2010).

Referring to the case, Frank credit for the assess is presented below-

Dividends

Franking credit

Unfranked dividend for $1000

Nil

Semi franked dividend $600

231.42

Franked credit for $2000

857.14

Tax on the income received as dividend:-

Dividend received

Franking credit

Total (Dividend+ Franking credit)

Tax rate

Tax charged

Net tax

$ 2000

857.14

2857.14

57

928.57

71.43

600

231.42

831.42

32.5%

270.21

38.79

1000

Nil

1000

32.5%

325

325

Total tax for dividend

 

 

 

 

435.22

(Ainsworth et.al, 2015)

Considering this particular case scenario, the tax will be as per the slab rate as prescribed in the law. The calculations are presented below in a  tabular format:

Income slab for the purpose of tax (Amount in AUD)

Tax charged

1-18,200

-

18,201-37,000

19 % for above $ 18200

37,00,-87,000

3572+32.5% for above 37,000

87,001- 180,000

$ 17547 + 37 % for above $ 80000

181,001 and above

$ 54232 + 45 % for above $ 180000

(Paturot et.al, 2013)

Calculation of the tax on the net total income

Particulars

Amount is AUD

Calculation of tax on net total income

($ 3572 + ( $ 68,000 - $ 37000) * 0.325)

$ 13,647

+ tax on dividend income

$435.22

Total tax payable

$ 14,082.22

+Medicare levy charges

$ 1410

Tax to be payable by assesse

$ 15492.22

  • PAYG by employer

($ 15,100)

Net tax

$392

Assumptions

Referring to the provided case scenario, Rafael who is a resident of Australia is not minor person and is an adult. Therefore, the total clubbed income with spouse of the concerned subject individual is evident not to exceed $150,000. Also, Medicare levy is $1410 along with no use of offset in the question.

Conclusion

Referring to the information produced in the previous segment that reflected different situation with respect to taxation rate applicable, emphasis has been given to address each situation. Hence it can be inferred that income and income tax rate both are important with respect to Australian tax law and it is legally mandatory for every earning individual of the s aid country to pay the required tax. Different tax rate is applicable for different income slab. Also Medicare levy and surcharge are equally important in calculating the income tax. The   citizenship of an individual for the said country is also important for tax calculation. The age group and the number of children is also evident to play a deciding role for tax  calculation  for an earning professional of Australia.

References

Ainsworth, A.B., Partington, G. and Warren, G., 2015, “Do franking credits matter? Exploring the financial implications of dividend imputation”.

ATO, 2016, “Medicare levy”, ATO. https://www.ato.gov.au/Individuals/Medicare-levy/

Minney, A., 2010, “The valuation of franking credits to investors”, JASSA, (2), p.29.

Mirrlees, J.A. and Adam, S., 2010, “Dimensions of tax design: the Mirrlees review”, Oxford University Press.

Oats, L. ed., 2012, “Taxation: A fieldwork research handbook”, Routledge.

Paturot, D., Mellbye, K. and Brys, B., 2013, Average personal income tax rate and tax wedge progression in OECD countries.

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

Taylor, G. and Richardson, G., 2012, “International corporate tax avoidance practices: evidence from Australian firms”, The International Journal of Accounting, 47(4), pp.469-496.

Woellner, R., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D., 2011, “Australian Taxation Law Select: legislation and commentar”,CCH Australia.

Xynas L., 2011, “Tax Planning, Avoidance and Evasion in Australia 1970-2010: The Regulatory Responses and Taxpayer Compliance”, Revenue Law Journal, Volume 20 | Issue 1.