Australian Citizenship And Taxation Law: Understanding The Case Of Kit

Guidelines for Justifying Australian Citizenship

Questions:

Case Study 1: Residence and Source

Case Study 2: Ordinary Income
 

From this scenario, Kit is the resident of Australia. Kit works for an American company that is located in Australia.  His salary is paid in his account in an Australian Bank ‘Westpac Bank' (Benjamin, 2010). Kit is the owner of this Australian bank and also he has a joint account. Conversely, Kit is a resident of Chile and also he is measured as the resident of Australia as because he has to make a permission of the double nationality. In some cases, this type of context describes that Kit is a citizen of Australia where he works for the American company which is situated in Australia. Using the kit is keeping a Chilean residency and at the same time he is also measured as an Australian citizenship since Kit has a double nationality. However, Kit is considered as a resident of Australia for the tax purpose as Kit has a residential house in Australia (BLACK and BALDWIN, 2010). Conversely, his wife needs to be also resided in the Australia almost half of the time in a year. Most of the time periods Kit needs to stay in the coasts of Indonesia and during the holidays also he remains in Australia. But Kit mostly needs to stay in Chile where Kit is considered to be a resident. The issue is whether Kit is a true citizen of Australia or not and whether he needs to pay Australian Tax as per the rules and regulations.

From this context, taxation law that is arranged by the Australian Taxation Office (ATO), this type of following characteristics  are needed to be checked and which justified the Australian citizenship of an individual:

In case of a person who comes to Australia with members of their family on several types of trips and also taking into consideration the reason behind the trip.

The association the individual has with the country, along with the family members, who are staying in the country (Case presentations, 2009).

The members of the family of the person, who live in Australia.

In the situation when the individual under consideration is an employee of Australia

If the person should have any bank account, like “Westpac bank” in Australia

If an individual possesses any assets like house, land, etc. and also a person that continues in Australia as an emigrant.

While staying in Australia, an Australian citizen needs to follow three main types of rule and they are: State, Federal and Local. As per the Australian Taxation Office, each and every citizen of Australia is liable to pay taxes for the money they earn in Australia.

From this particular case study it can be understood that Kit is a resident of the both countries of Australia and Chile since he is an employee in Australia (Covaleski, Dirsmith and Weiss, 2013). Kit receives his salary in the bank account of "Westpac bank" in Australia. Kit is also the joint owner of a bank account with his wife. Kit is also a resident of Chile, and he is considered as the resident of Australia because he has an authorization of double nationality. Moreover, Kit also has a home in Australia (Findlay, 2013). This is another reason for which Kit got the citizenship of Australia. As per the Australian Taxation Act, if a person buys any asset like that of house, land, etc. in Australia then he or she is bound to be considered as a citizen of Australia. Therefore the individual needs to pay the taxes as per the Australian Taxation Law. As a result of this, the income of Kit will fall under the category of assessable income like any other Australian citizen as he is considered to be a proper citizen of Australia.

Kit's Case Study: Assessable Income and Taxation Law

Conclusion

Therefore as per the terms and conditions of Australian Citizenship and Australian Taxation Law, Kit’s income falls under the category of assessable income (Hoogsteder et al., 2014). Thus under any circumstances or situation, Kit is bound to pay the taxes by following the specific rules and regulation of the Australian Taxation Office.  

According to this scenario or the context, in the case, the whole aim of the California Copper Syndicate was to obtain the assets or the land that fully consisted copper. However, the business did not make any endeavor to extract the copper from the land or the ground. At last, the land was sold by the organization in Australia to another company. The verdict of the court was that the organization or the firm was legally liable to give the income tax to the Australian government because the money that it earned by selling the land was not a part of capital gain and thus has to fall under the category of ordinary income (Issue Information, 2016). As per the guidelines in the Australian Taxation law, the corporation is ready to pay their income tax on that amount that it got through selling the land.

In this particular scenario, a trade of the coal mining was established by a corporate on a land which had been bought by them (WALLER, 2007). After a point of time, the corporation removed or cleared the coal and also took the decision to sell the ground land for money or the revenue. Accordingly, to obtain more benefits from the deal the corporate subdivided this land and also built another framework on it so that it becomes more valuable. However, as per the court verdict, made by the organization was done in order to beautify the land and to gain more benefits and revenue from it (Kurtz, 2010). Moreover, since the organization is not in the business of real estate, any transaction of land by this company will not fall under the category of ordinary income. The verdict given by the court said that the company would benefit in a better way if they are able to subdivide the land. Thus through the analysis and evaluation of the situation, the organization is not legally liable to pay taxes as the money earned through this is not their ordinary income. 

In this case, the taxpayer under consideration has paid the tax for a land that is located in the front of the beach of white fords. The ground or the land can be utilized for the purpose of fishery as it is situated just beside the sea beach. After a point of time the difficult shares of the business were sold out (Mayer, 2009). The newly became shareholders of the organization and got the ground or the land after getting the management power and also took the decision of trading and subdividing the land in order to increase the shares of their own profits. But after the land was subdivided there was a disagreement amongst the shareholders about whether the profit would be added to their ordinary income or not.  Ultimately, the verdict of the court was that the shareholders need to take the responsibility of managing the ground or the land in order to generate revenue from it (O'Neill, 2006). As a consequence of this, the shareholders started a new business of land development so that the income generated from it would become a part of their ordinary income. Also, to trade the ground under the team need to be measured as such a simple or the ordinary profits or the income to the Section 26(a) of ITAA (1983)(Taylor, 2011)|. The court verdict was that the revenues or the profits derived from that it needs to be measured as the simple or the ordinary income or the profits.

Case Study: California Copper Syndicate and Coal Mining

This type of scenario is closely related to the income tax system. The tax was assessed for quite a long period of time. But after a point of time the decision was taken that the commissioner would take control and responsibility of the income that would be derived from the land (Parker, 2012). The profits or the income is ordinary and the tax should be levied on it as per the rules of the Australian Taxation Law. 

This particular case elaborates the situation where one’s profits can be decreased. The situation is that a person wants to make some profit by selling a part of the land owned by him (Santos Arévalo and García Trallero, 2014). But the problem arises in the fact that whether the profit made by the individual through the selling of the land will fall under assessable income or not. As per the Australian Taxation Act Section 25(1) of ITAA (1983), the income made by that individual would be considered to be taxable.

A company related to the sand business through ordinary income in the country Australia, and it was keeping a land after clearing the sand from this (Seibel, 2008). As because the land was for commercial use,  the court give the decision that the profits or the income need to be measured as an ordinary or single income.

In this context, the taxpayer is a farmer. The farmer to intends to buy a plot of land though there is a disagreement disagreement (Stappen et al., 2014). The farmer would benefit if he gets the land. According to this scenario, it need not fall under an ordinary or a single income or the profits.

In this case, there is a land owned by two brothers. There are some houses present on the land (Tholen, 2013). In order to renovate the land, the homes are needed to be cleared. The problem occurred when there was confusion about whether two brothers need to pay the taxes or not. The verdict of the court also said that they need not pay the taxes.   

References

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Findlay, M. (2013). Contemporary challenges in regulating global order. Basingstoke: Palgrave Macmillan.

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Kurtz, R. (2010). Oil Pipeline Regulation, Culture, and Integrity. Public Integrity, 13(1), pp.25-40.

Mayer, T. (2009). Honesty and Integrity in Academic Economics. Challenge, 52(4), pp.16-24.

O'Neill, W. (2006). Pyrophosphate, Alkaline Phosphatase, and Vascular Calcification. Circulation Research, 99(2), pp.e2-e2.

Parker, C. (2012). Twenty years of responsive regulation: An appreciation and appraisal. Regulation & Governance, 7(1), pp.2-13.

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Seibel, H. (2008). Islamic Microfinance in Indonesia: The Challenge of Institutional Diversity, Regulation, and Supervision. Journal of Social Issues in Southeast Asia, 23(1), pp.86-103.

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Tholen, B. (2013). Dirty Hands or Political Virtue?. Public Integrity, 15(2), pp.187-202.

WALLER, V. (2007). The Challenge of Institutional Integrity in Responsive Regulation: Field Inspections by the Australian Taxation Office. Law & Policy, 29(1), pp.67-83.