tax notes
Contents
TAX LEG: ITAA1936 [eg. S6(1)], ITAA1997 [eg. S6-5], FBTAA 1986, GST Act 1999.
Topic 2 – Jurisdiction to Tax taxable payable
Tax Payable (s4-10 ITAA1997)= (Taxable income * Tax Rate) – Tax Offsets
(Tax/Financial Year = I July – 30 June) – Income tax payable on a year-by-year basis s3-5 ITAA97.
Taxable income (s 4-15 ITAA) = Assessable Income less Deductions
Assessable Income (s6-1) = Ordinary income (s6-5) and Statutory income (s6-10) but not Exempt income (s6-15).
Assessable income includes (s6-1):
Residents: All ordinary income and statutory income of an Australian resident taxpayer derived directly or indirectly from all sources, whether in or out of Australia, during the income year: s6-5(2) & s6-10(4).
Foreign residents: All ordinary income and statutory income of a foreign resident taxpayer derived directly or indirectly from all Australian sources and any other amounts specifically included: s6-5(3) & s6-10(5).
Deductions = General deductions (s8-1) and specific deductions(s8-5).
The determination of a taxpayer’s ordinary income depends on whether the taxpayer is an Australian or foreign resident and the source of the income. The income tax rate applied for individuals differs between Australian and foreign residents. individuals – residence for tax purposes
S995-1 ITAA97: “Australian resident” is a person who is a resident of Australia for the purposes of ITAA36. “Foreign resident” is a person who is not a resident of Australia for the purposes of ITAA36.
4 residency tests in s6(1)ITAA36 (definition of resident).
Can look at events after year-end to decide: Applegate (1979).
Can be a dual resident – look at tax treaty.
Status under migration law not determinative for tax purposes.
Taxpayer will be a resident if they satisfy any of the residency tests in s6(1) ITAA36.
Residency is determined on a year-by-year basis and a taxpayer may be a resident for part of the year.
ORDINARY RESIDENT TEST (Primary test of residency)
TAX LEG: ITAA1936 [eg. S6(1)], ITAA1997 [eg. S6-5], FBTAA 1986, GST Act 1999.
Topic 2 – Jurisdiction to Tax taxable payable
Tax Payable (s4-10 ITAA1997)= (Taxable income * Tax Rate) – Tax Offsets
(Tax/Financial Year = I July – 30 June) – Income tax payable on a year-by-year basis s3-5 ITAA97.
Taxable income (s 4-15 ITAA) = Assessable Income less Deductions
Assessable Income (s6-1) = Ordinary income (s6-5) and Statutory income (s6-10) but not Exempt income (s6-15).
Assessable income includes (s6-1):
Residents: All ordinary income and statutory income of an Australian resident taxpayer derived directly or indirectly from all sources, whether in or out of Australia, during the income year: s6-5(2) & s6-10(4).
Foreign residents: All ordinary income and statutory income of a foreign resident taxpayer derived directly or indirectly from all Australian sources and any other amounts specifically included: s6-5(3) & s6-10(5).
Deductions = General deductions (s8-1) and specific deductions(s8-5).
The determination of a taxpayer’s ordinary income depends on whether the taxpayer is an Australian or foreign resident and the source of the income. The income tax rate applied for individuals differs between Australian and foreign residents. individuals – residence for tax purposes
S995-1 ITAA97: “Australian resident” is a person who is a resident of Australia for the purposes of ITAA36. “Foreign resident” is a person who is not a resident of Australia for the purposes of ITAA36.
4 residency tests in s6(1)ITAA36 (definition of resident).
Can look at events after year-end to decide: Applegate (1979).
Can be a dual resident – look at tax treaty.
Status under migration law not determinative for tax purposes.
Taxpayer will be a resident if they satisfy any of the residency tests in s6(1) ITAA36.
Residency is determined on a year-by-year basis and a taxpayer may be a resident for part of the year.
ORDINARY RESIDENT TEST (Primary test of residency)