The method of referencing to be used in this assignment is the American Psychological Association (APA) referencing method. Additional information regarding this method is available through the library and the Academic Learning Centre. When making a reference, cite the original source or authority in preference to a secondary source such as the textbook, especially when you are discussing various sections of legislation. This means you should make reference to legislation, cases and Tax Rulings as a priority to back up any arguments that you make in your assignment.Read Taxation Ruling TR 2009/5 and answer the following questions. Taxation Ruling TR 2009/5 can be found on the ATO website at www.ato.gov.au .
(a) Seller Pty Ltd makes a payment of $10 000 to Buyer Pty Ltd to cover the cost of in-store promotional activities relating to its products. What effect will this payment have on the cost of trading stock that Buyer Pty Ltd purchases from Seller Pty Ltd?
(b) What is the appropriate tax treatment of the payment mentioned in (a) above in the hands of Buyer Pty Ltd and Seller Pty Ltd?
(c) Seller Pty Ltd provides a volume rebate discount of 10% when Buyer Pty Ltd purchases more than $50 000 worth of product in a calendar month. Buyer Pty Ltd has qualified for this discount ten times in the past twelve months.
What are the tax implications of the information given in (c) above?
(d) Refer to the information given in (c) above. As a condition of claiming the volume rebate discount Buyer Pty Ltd is also required to lodge a rebate claim form each month before the end of the month. Buyer Pty Ltd often neglects to lodge the rebate claim form. What are the tax implications of this action?