country
$20 Bonus + 25% OFF
Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!

Questions:

1. Alan is an employee at ABC Pty Ltd (ABC). He has negotiated the following remuneration package with ABC:
 
• salary of $300,000;
• payment of Alan's mobile phone bill ($220 per month, including GST). Alan is under a two-year contract whereby he is required to pay a fixed sum each month for unlimited usage of his phone. Alan uses the phone for work-related purposes only;
• Payment of Alan's children's school fees ($20,000 per year). The school fees are GST free.
 
ABC also provided Alan with the latest mobile phone handset, which cost $2,000 (including GST).
 
At the end of the year ABC hosted a dinner at a local Thai restaurant for all 20 employees and their partners. The total cost of the dinner was $6,600 including GST.
 
(a) Advise ABC of its FBT consequences arising out of the above information, including calculation of any FBT liability, for the year ending 31 March 2015. Assume that ABC would be entitled to input tax credits in relation to any GST-inclusive acquisitions.
 
(b) How would your answer to (a) differ if ABC only had 5 employees?
 
(c) How would your answer to (a) differ if clients of ABC also attended the end-of-year dinner?
 
2. Rubber Co manufactures tennis balls. On 1 January 2010, Rubber Co purchased a new machine for $1.1m (inclusive of GST) which it used to produce the tin cans in which its tennis balls were placed for sale to retailers. At the time of acquiring the machine , Rubber Co estimated that the machine would have an effective life of 10 years before it needed to be replaced. Subsequently, on 1 January 2014, as a result of new technology, a better quality machine became available and Rubber Co decided to sell the original machine for $330,000 (inclusive of GST) and purchase a new machine for $2.2m (inclusive of GST).
 
Requirement:
 
What are the tax consequences of these arrangements under Div 40ITAA97?
 
 

Answers:

(1).

Fringe Benefit Tax

The fringe benefits are mainly certain types of benefits that provided by the employers to the employees other than cash benefits such as salary, wages, commissions or rewards. The assessable fringe benefit is when the fringe benefit exceeded $2,000 in a fringe benefit tax year as per rules prescribed by Australian (Body, 2008) Taxation office. As per the undertaken case study the ABC PTY Ltd provides one of its employee named Alan mobile phone bill $220/month including GST, as Alan use the phone for office use only thus its will be not included in fringe benefit. Besides this, the company pay Alan’s children’s school fees $20,000/year and it must be included in fringe benefit. Besides this, company provide Alan a latest mobile phone handset, which cost $2,000, including GST it must be included as fringe benefit (Martin, Gregor and Rice, 2008). Apart from this, company spend $6,600, including GST in a Thai restaurant for the dinner of its 20 employees with their partner. This amount will be included in fringe benefit. In this case the fringe benefit tax will be calculated as follows:

a) ABC have to pay fringe benefit tax for Alan’s children’s school fees $20,000/year as it is GST free thus it is considered type 2 benefit. The tax rate will be applied @ 1.9608 (Taxation reform blueprint, 2004).

$20,000*1.9608 = $39,216

FBT rate 49% thus $39,216*49% = $19215.84     

For the handset provided by the company $2,000 including GST is considered as type 1 benefit. The tax rate will be applied @ 2.1463

$2,000*2.1463 = $4292.60

FBT rate 49% thus $4292.60*49% = $2103.374 (WALLER, 2007).

The company spend $6,600, including GST in a Thai restaurant for dinner of the 20 employees, which is considered as type 1 benefit. The tax rate will be applied @ 2.1463

$6,600*2.1463 = $ 14165.58

FBT Rate 49% thus $ 14165.58 * 49% = $6941.1342

b) No, the answer will be the same as the company has to pay the same cost.

c) Yes, this time the answer will be differ as the clients also included in the dinner thus it will not be fringe benefit and it will be considered as business meeting and the employees are supposed to perform their duties. 

 

(2).

In the year 2010, on 1st January, Rubber Co purchased a new machine at the rate of $1.1m including the GST and the effectiveness of the machines is seemed to be 10 years. In the year 2014, 1st January, Rubber Co decided to sell off the original machine at the rate of the $330,000 with including the GST and thus the company was also able to purchase the new machine at the rate of $2.2m with the inclusion of GST (WALLER, 2007). Thus according to the tax consequences of the arrangements that are made according to the Div 40ITAA97, the taxes should be paid for the growth and the expansion of the purchases for the sales and thus it also helps for continuation of the purchases and the one sell. According to the act of the Div 40ITAA97, the company Rubber Co has to pay all the taxes with including the number of times the purchases and the sales of the goods takes place. Thus for the proper following of the taxation system, the Div 40ITAA97 is applied in the case of the maintenance of the website for the proper generation of the bills and thus helps in the maintenance of the accounts of the company (Martin, Gregor and Rice, 2008). The usage of the accounting software is also included for the enhancement of the proper maintenance of the account of the company and thus it also helps in the reduction of the taxes for the proper carrying out the business process. 

 

References

Body, J. (2008). Design in the Australian Taxation Office. Design Issues, 24(1), pp.55-67.

Martin, N., Gregor, S. and Rice, J. (2008). User centred information design practices and processes at the Australian Taxation Office. Information Design Journal, 16(1), pp.53-67.

Taxation reform blueprint. (2004). [Barton, A.C.T.]: Australian Chamber of Commerce and Industry.

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.

OR

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2017). Taxation Law Australia . Retrieved from https://myassignmenthelp.com/free-samples/taxation-law-australia.

"Taxation Law Australia ." My Assignment Help, 2017, https://myassignmenthelp.com/free-samples/taxation-law-australia.

My Assignment Help (2017) Taxation Law Australia [Online]. Available from: https://myassignmenthelp.com/free-samples/taxation-law-australia
[Accessed 02 April 2020].

My Assignment Help. 'Taxation Law Australia ' (My Assignment Help, 2017) <https://myassignmenthelp.com/free-samples/taxation-law-australia> accessed 02 April 2020.

My Assignment Help. Taxation Law Australia [Internet]. My Assignment Help. 2017 [cited 02 April 2020]. Available from: https://myassignmenthelp.com/free-samples/taxation-law-australia.


For years, MyAssignmenthelp.com has been operating as one of the cheap assignment help providers in the USA. We are one of the best college paper writing services that keep service price minimal. We do not let the affordability of our service to hamper the standard of our work. We have separate teams of experts to provide report writing help . At MyAssigenmnthelp.com, we believe in earning credibility, so students can pay for assignments only after getting satisfied solutions. Tough assignments bother you? Trust us with your project. You will not regret paying us to write assignments for you.

Latest Tax Samples

HI6028 Taxation Theory, Practice And Law Assessment

Download : 0 | Pages : 8

Answers: Question 1 Provisions The provision related with the determination of the assessable income of the partnership firm is contained in the Pt III of Division 5 of the Income Tax Assessment Act 1997.  Tax is chargeable on the all income which is derived by the firm from the ordinary course of the business activity (Butler, and Giles, 2018). Along with this, normally all the expenses which are incurred for carrying the business acti...

Read More arrow

HI6028 Taxation Theory Practice And Law T3 2018

Download : 0 | Pages : 6

Answer: Introduction The Section 4-15 of the Income Tax Assessment Act, 1997 lays down the way in which taxable income is to be calculated for the income year (1st of July to 30th June), as per this section taxable income = Assessable income – Deductions, Assessable income is as explained in division 6 and the deductions allowable in division 8 where division 35 prevents losses from non-commercial business activities that may ...

Read More arrow

200869 Principles Of Taxation Law

Download : 0 | Pages : 7

Answer: Introduction: The current case study provides the scenario that the Rob has inherited the business that contained the small plot of land. An adjacent plot of land was purchased by Rob so that he can set up the plant of concrete recycling by paying stamp duty and legal fees. Due to the rapid residential development Rob failed to set up the concrete recycling plant. On noticing the current boom in the residential property if Rob takes i...

Read More arrow Tags: Australia Balmain Management principlesof finacial markets University of New South Wales 

TABL3016-Case Report Of Kishore V Tax Practitioners Board

Download : 0 | Pages : 9

Answer: Introduction: In the case of “Kishore v Tax Practitioners Board [2016] AATA 764” Mr Kishore became the registered tax agent on 7th March 2011, at the time of working for his employer, Charltons CJC Pty Ltd. The company provided accounting and tax agent services for the clients. In this case, seven preliminary questions originating from the decisions of the board defined that Mr Kishore considered his behaviour in...

Read More arrow

Law300 Taxation Law Assignment Management

Download : 0 | Pages : 8
  • Course Code: LAW300
  • University: Charles Sturt University
  • Country: Australia

Answer: Income Tax Computation   Accounting Income tax Gross salary 50,000 50,000 PAYG   (3,250) Performance bonus 25,000 25,000 Clothes allowance 4,500 4,500 ICA ANZ annual membership 1,250 1,250 Trip charges   (4,650) Taxi expense   (4,000) Billed income 45,0...

Read More arrow
Next
watch

Save Time & improve Grades

Just share your requirements and get customized solutions on time.

question
We will use e-mail only for:

arrow Communication regarding your orders

arrow To send you invoices, and other billing info

arrow To provide you with information of offers and other benefits

1,240,264

Orders

4.9/5

Overall Rating

5,067

Experts

Our Amazing Features

delivery

On Time Delivery

Our writers make sure that all orders are submitted, prior to the deadline.

work

Plagiarism Free Work

Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.

time

24 X 7 Live Help

Feel free to contact our assignment writing services any time via phone, email or live chat.

subject

Services For All Subjects

Our writers can provide you professional writing assistance on any subject at any level.

price

Best Price Guarantee

Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.

Our Experts

Assignment writing guide
student rating student rating student rating student rating student rating 5/5

610 Order Completed

100% Response Time

Cheryl Zhao

PhD in Statistics

Singapore, Singapore

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

203 Order Completed

97% Response Time

Richard Alpert

PhD in Psychology

London, United Kingdom

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

285 Order Completed

99% Response Time

Eugene Baranowski

MBA in Supply Chain

London, United Kingdom

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

1592 Order Completed

96% Response Time

Jane Sima

Ph.D in Psychology with Specialization in Industrial-Organizational Psychology

Singapore, Singapore

Hire Me

FREE Tools

plagiarism

Plagiarism Checker

Get all your documents checked for plagiarism or duplicacy with us.

essay

Essay Typer

Get different kinds of essays typed in minutes with clicks.

edit

GPA Calculator

Calculate your semester grades and cumulative GPa with our GPA Calculator.

referencing

Chemical Equation Balancer

Balance any chemical equation in minutes just by entering the formula.

calculator

Word Counter & Page Calculator

Calculate the number of words and number of pages of all your academic documents.

Refer Just 5 Friends to Earn More than $2000

Check your estimated earning as per your ability

1

1

1

Your Approx Earning

Live Review

Our Mission Client Satisfaction

expert working good with ratio analysis i got full marks for ratio but overall good presentation.

flag

User Id: 207116 - 02 Apr 2020

Australia

student rating student rating student rating student rating student rating

excellent work by tutor and quality of good work excellent work by tutor and quality of good work excellent work by tutor and quality of good work excellent work by tutor and quality of good work excellent work by tutor and quality of good work

flag

User Id: 264013 - 02 Apr 2020

Australia

student rating student rating student rating student rating student rating

Brilliant work, paid attention to every details, And submitted on time for review.

flag

User Id: 338016 - 02 Apr 2020

Australia

student rating student rating student rating student rating student rating

The report was exceptional. Thank you for helping me with this assignment, and I am very satisfied with the result. The content was exceptional and my grade was exactly what I needed, the writer was very on point and finished my report in a timely ma...

flag

User Id: 262907 - 02 Apr 2020

Australia

student rating student rating student rating student rating student rating
callback request mobile
Have any Query?