It is an online exam, and the details are in the files I attached. I will share the question with you guys when the test starts and please get back the answer with me within 2 hours
2021/11/23 上午4:17 Assessment 3: Information - (BLO5539) Australian Income Tax Law & Practice - SY https://vucollaborate.vu.edu.au/d2l/le/content/1118190/viewContent/6609241/View 1/3 Assessment 3: Information FINAL TEST ASSESSMENT 3 ASSESSMENT OVERVIEW Overview Length or Duration Worth Due An open book, supervised test covering material covered in Weeks 1- 7 2 hours with 10 minutes reading time 50% Week 8 Key Assessment Information PURPOSE The unit learning outcomes assessed are: LO1: Resolve tax problems by applying common law and legislation in Australia's tax system, including the Tax Agent Services Act 2009 LO2: Interrogate the core provisions and the interaction between the Goods and Services Tax, Fringe Benefits Tax, Income Tax, Capital Gains Tax and Trading Stock in Australia LO3: Critically review and explain the specific taxing requirements of each of the key entities that operate in the Australian taxation system LO4: Critically review and explain the key areas of taxation administration; including returns, assessments, withholding, rulings, appeals, information requests and the differences between planning, evasion and avoidance LO5: Exemplify professional judgments and advise on issues relating to tax payable by individuals, companies, superannuation funds and other business structures LO6: Review and explain developing taxation law in areas such as International Taxation and Advanced Capital Gains Tax DETAILS (BLO5539) Australian Income Tax Law & Practice -… XZ https://vucollaborate.vu.edu.au/d2l/le/content/1118190/navigateContent/651/Previous?pId=6609234 https://vucollaborate.vu.edu.au/d2l/le/content/1118190/navigateContent/651/Next?pId=6609234 https://vucollaborate.vu.edu.au/d2l/home/1118190 BLO2206, Topic 1 Session 2 Residency, source and derivation Updated: 1 February 2021 Acknowledgement of Country – Melbourne We acknowledge the Ancestors, Elders and families of the Kulin Nation who are the Traditional Owners of University land. We also acknowledge all Traditional Owners of Country throughout Victoria and pay our respect to their culture, and their Elders past, present and future. As we share our own knowledge practices within the University may we pay respect to the deep knowledge embedded within the Aboriginal community and their ownership of Country. We acknowledge that the land on which we meet is a place of age old ceremonies of celebration, initiation and renewal and that the Kulin people’s living culture has a unique role in the life of this region. ‹#› General jurisdictional rules – broad rules Victoria University, CRICOS No. 00124K (Melbourne), 02475D (Sydney), RTO 3113 Residents Assessed on their ordinary and statutory income from all sources Individual residents subject to Medicare levy and Medicare levy surcharge Non-residents Assessed on their ordinary and statutory income from Australian sources Individual residents not subject to Medicare levy or Medicare levy surcharge ‹#› Residence Victoria University, CRICOS No. 00124K (Melbourne), 02475D (Sydney), RTO 3113 Definition of resident Individuals 1. Resides test 2. Domicile and permanent place of abode test 3. 183-day test 4. Commonwealth superannuation test Companies 1. Incorporation test 2. Central management and control test 3. Control of voting power test See, definition of a resident in s 6(1) Income Tax Assessment Act 1936 (ITAA36). Only one out of four tests needs to be satisfied for an individual to be considered a tax resident of Australia. ‹#› Resides test – individuals An individual is a resident of Australia if the person resides in Australia Resides is not defined in the legislation and therefore takes its ordinary meaning Place where a person resides is a question of fact The Commissioner places an emphasis on: Intention or purpose of presence Family and business or employment ties Maintenance and location of assets Social and living arrangements. In addition to the above behavioural characteristics of the taxpayer, the Commissioner considers there must be sufficient time elapsed to demonstrate continuity, routine or habit. See, Tax Ruling 98/17 Victoria University, CRICOS No. 00124K (Melbourne), 02475D (Sydney), RTO 3113 ‹#› Examples of the resides test Victoria University, CRICOS No. 00124K (Melbourne), 02475D (Sydney), RTO 3113 BA is offered a 18-month contract to play soccer in AUS Club provides accommodation BA intends to remain in AUS for the full term of his contract; thus BA leases house, sells car and redirects the family mail to AUS BA’s children attend school Wife and children become involved in sporting activities BA’s contract is terminated on the ground of non-performance after 4 months and is paid out for an agreed sum. ML comes to AUS to do research for 5 months, but actually stays for 7 months to complete her project Husband and children do not accompany her to AUS ML assist her husband in running the family business ML stays in a hostel and use credit card for daily expenses ML’s research is often interrupted by constantly contacting her husband about their family business ML needs to make a quick trip home for business purpose 5-minute activity: Form a breakout room, read the examples in paragraphs 68+ of TR 98/17 and advise the above two taxpayers whether they are an Australian resident under the resides test. ‹#› Individual Residency Tests: Domicile Test Under the domicile test, an individual is a resident of Australia if his or her domicile is in Australia, unless the Commissioner is satisfied that the person has a permanent place of abode outside Australia. The Commissioner considers various factors in Ruling IT 2650 to ascertain whether a taxpayer has a “permanent place of abode outside Australia”. Factors include: Intended and actual length of stay in the overseas country; Intentions to stay in the overseas country permanently or temporarily; Location of established home; Duration and continuity of taxpayer’s presence in overseas country; Durability of Australian associations (eg, place of education of taxpayer’s children). Victoria University, CRICOS No. 00124K (Melbourne), 02475D (Sydney), RTO 3113 ‹#› Individual Residency Tests: 183-day test Under the 183-day test, an individual is a tax resident of Australia when his or her physical presence in Australia, continuously or intermittently, is for more than one-half of the income year. Exceptions: If the Commissioner is satisfied that the individual’s usual place of abode is outside Australia; and The individual does not intend to take up residence in Australia. Working holiday visa holder who was in Australia for more than 183 days was not a resident as their “usual place of abode was outside Australia”: Re Koustrup v FCT (2015) Special rules apply to working holiday makers Victoria University, CRICOS No. 00124K (Melbourne), 02475D (Sydney), RTO 3113 ‹#› Individual Residency Tests: Superannuation Test Applies in relation to Commonwealth superannuation funds, thus it’s also known as ‘Commonwealth public servant rule’. Under the superannuation test, the member of a Commonwealth superannuation fund (ie, Commonwealth public servants) and the member’s family are deemed to be tax residents of Australia. Example: the public servants remain resident of Australia for tax purposes when posted overseas on government business so that Australia retains taxing rights over their income Victoria University, CRICOS No. 00124K (Melbourne), 02475D (Sydney), RTO 3113 ‹#› Temporary residents – individuals (Div 768) Taxpayers are temporary residents if: they hold a temporary visa under the Migration Act 1958, they and their spouse are not an Australian resident within the meaning of the Social Security Act 1991 - ‘a person who resides in Australia and is an Australian citizen, the holder of a permanent visa or a protected special category visa holder.’ Temporary residents are provided with tax relief, even if they meet a residency test: Most foreign sourced income is not taxed in Australia, except income earned from employment or services performed overseas while you are a temporary resident. Pay tax at the Australian resident income tax rates Disregard Capital Gains arising from disposal of property except for ‘taxable Australian property’ – no Capital Gain Tax (CGT) on the disposal of foreign assets Victoria University, CRICOS No. 00124K (Melbourne), 02475D (Sydney), RTO 3113 ‹#› Relationship: resident, tax resident, foreign resident, temporary resident Australian Resident under the Social Security Act 1991 is a citizen, permanent resident, protected SCV holder (New Zealander arrived in AUS before 26 Feb 2001). This is a very different test than the tax residency test. The terms foreign resident and non-resident have the same meaning. One is the definition from the old ITAA1936, while the other is from the new ITAA1997. Australian tax resident and foreign resident are exclusive; either A or B. Temporary resident: is tax resident, but s/he and spouse are not taxed as full Australian residents Examples? Victoria University, CRICOS No. 00124K (Melbourne), 02475D (Sydney), RTO 3113 ‹#› Companies Residency Tests: overview Only one out of three tests needs to be satisfied for a company to be considered a tax resident of Australia: See, definition of a resident in s 6(1) ITAA36. Victoria University, CRICOS No. 00124K (Melbourne), 02475D (Sydney), RTO 3113 ‹#› Place of incorporation test A company that is incorporated in Australia under the Corporations Act 2001 (Cth) is automatically a tax resident of Australia, regardless of any other factors. If this is the only test to identify companies’ residency, what is the consequence? Tax avoidance through strategically incorporating Victoria University, CRICOS No. 00124K (Melbourne), 02475D (Sydney), RTO 3113 ‹#› Central management and control test A company is a resident of Australia if it: See, s 6(1) ITAA36; Ruling TR 2004/15 set out the Commissioner’s view, but it has been replaced with TR 2018/5 following the Hight Court decision in Bywater Investments Limited & Ors v Commissioner of Taxation [2016] HCA 45 Victoria University, CRICOS No. 00124K (Melbourne), 02475D (Sydney), RTO 3113 ‹#› Carries on business in Australia Central management & control in Australia Resident of Australia Central management and control test: Commissioner’s interpretation of Bywater The Commissioner has determined in TR 2018/5 the relevant factual matters for consideration are as follows: Victoria University, CRICOS No. 00124K (Melbourne), 02475D (Sydney), RTO 3113 ‹#› Controlling shareholders test Two-limb test: Voting power is controlled by shareholders who are residents of Australia (that is, more than 50% of the voting power at general meetings); and The company is carrying on business in Australia (same as the first limb of the central management and control test). Victoria University, CRICOS No. 00124K (Melbourne), 02475D (Sydney), RTO 3113 ‹#› Superannuation funds, Trusts & Partnership Superannuation funds The fund must be established in Australia or have assets in Australia, and The central management and control must be in Australia, or More than 50% of the net value of the fund must be controlled by a resident individual who is active. Trusts There are many different definitions of residency depending on the type of trust although generally it will come down to two tests as defined in 95(2) ITAA1936: Whether the trustee of the trust is a resident, or Where the central management and control is located. Partnership It is generally the residency of the partners which is relevant. For example, typically a non-resident partner would have to include