Australian taxation law Assignment Example | Topics and Well Written Essays - 1000 words

Australian taxation law - Assignment Example According to the above definition of Australian resident for taxation, the Indian consultant does not qualify to be a resident, since the period of stay during the year of income is only five months. The financial year begins on 1st July to 30th June. In this respect, income earned by the Indian IT consultant between 1st July 2012 and 30th June 2013 will be taxed in financial year ending 31st July 2013. Further, according to provisions of the same section, income earned in July 2013 will be assessed for tax in July 2013. Section 6-5(3) of ITAA 97, income according to ordinary concepts states that income derived by a foreign resident directly or indirectly from all Australian sources is assessable for income taxes. 2. An Australian born viticulturist (wine maker) who accepts seasonal contracts in Australia, New Zealand, South Africa and France. The Australian born viticulturist is a resident for taxation purpose. Even though the wine maker accepts seasonal contracts from foreign count ries, by birth and stay qualifies as a resident. According to ITAA 97 section 6-5(2), income according to ordinary concepts, assessable income includes all incomes derived directly or indirectly from all sources whether in or outside Australia during the year of income. Therefore, the Australian Viticulturist will be taxed on income derived from seasonal subcontracts in the stated countries. In Malayan Shipping Co Ltd v FCT, the court held that even though the company engaged in foreign trade, the management was Australian resident and therefore income derived from foreign income was assessable for tax purposes. 3. An Italian born tradesman who migrates to Australia on 30 March 2013. According to the definition of Australian resident, an individual qualifies to be a resident by among other things moving to live in Australia. Therefore, the Italian tradesman qualifies to be a resident by migrating to Australia. Based on ITAA 97 section 6-5 (3), Income according to ordinary concepts, the income of the Italian tradesman to be assessed includes that part derived directly or indirectly from Australian sources between 30 March 2013 and 30th June 2013 when the year of income ends. 4. An Australian born bank employee sent to a Singapore branch for 6 months. The bank employee is a resident by birth. According to ITAA 97 section 6-5(2), income according to ordinary concepts, assessable income to Australian residents includes income derived directly from all sources be it local or foreign sources during the year of income. Therefore, the income earned will be assessed in the financial year within which it falls. 5. A person of Australian domicile living in Sydney. The fact that the person is a domicile and lives in Sydney, Australia is sufficient qualification for residency. According to ITAA 97 section 6-5(2), income according to ordinary concepts, assessable income for Australian residents includes income derived directly and indirectly from all sources. This means tha t income for Australian domicile will be taxed in the year of income it falls. PART B CALCULATE the minimum amount of net capital gain which is to be included in his assessable income. You must indicate how every item mentioned above