Question no. 3 Please refer to the direct quotation below from the Australian Taxation Office (ATO) website: www.ato.gov.au for this question. Consider the following extract: “Base erosion and profit...

Answer to Question 3 -
Identify the facts – BEPS is a way of international or multinational companies to pay less taxes as compared to domestic companies by taking advantage of cross border transactions with their holding or subsidiary company. This indirectly demotivates to domestic companies to pay taxes and create an atmosphere or environment of tax erosion within the country.
Identify the relevant tax laws and cases or cases or other key tax sources -     In order to curb such policies of tax erosion, in 2016 DPT applied a 40% tax rate on the diverted profit offshore to related parties. Many penalties have been imposed from 2017 for late submission of documents or sharing misleading data.
Apply the relevant laws and cases to the facts – There are various new initiatives implemented by Australian Tax authority to curb the issues of tax evasion. OECD has issued guidance note from 01st January 2018 and there has been change in transfer pricing rules from 01st July 2016. A stronger transfer pricing legislation has been imposed. New tax requirements on foreign investments to ensure that funds are invested in Australian country to not avoid taxation.
Provide Conclusion – The Australian tax authorities has come up with many new tax regulations to ensure that the issues relating to tax evasion has been resolved and coming up with new regulations to cover the loopholes in the system.     

Answer to Question 4 –
There are two methods of calculating depreciation – prime cost method and diminishing value...