Case Law -Assignment



Introduction

Every country has its own set of rules and procedures to follow in order to maintain proper accountability and sustainability. Tax is compulsory payment necessary to be paid by every national and the residents of that particular country. Every country follows its own tax laws for imposing tax on its residents. In Australia, The Income Tax Assessment Act is followed. According to ITAA, income tax is levied “upon the taxable income derived during the year of income by any person”. In case of a real person, different to a natural person in the capacity of a trustee, tax is imposed on taxable income of that year of that person in accordance with Income tax (Individuals) Act applicable to that year, at rates declared by the Income tax (Rates) Act. As far as company is concerned, company is a legal entity, incorporated within the country or major of its management and control is available in the country then it is termed as resident company or else otherwise a non resident company. A company, other than a company that comes in the capacity of trustee, tax is imposed on taxable income of that company by the Income Tax (Companies, Superannuation funds and Corporate Unit Trusts) Act applicable to that particular year of income. A company is defined in section 6 as an artificial body that includes all bodies or associations, corporate or incorporated, but does not include partnerships.

Where a person derives income in the capacity of a trustee, save where he derives in the capacity of a trustee of a superannuation fund, tax is levied by section 98, 99 and 99A of division 6 of Pt.III of the whole of, or a part of, the net income of the trust estate, derived during that income year. Section 17 remains inapplicable here because a trustee does not derive taxable income. Rather the net income of trust property is calculated in accordance with section 95 which describes the calculation of taxable income of a person or a company that is not a trustee. The notion of the year of income is in this instance imported by the hypothesis if the trustee were a taxpayer”—on which the calculation is made. Tax is imposed by the Income Tax (Individuals) Act applicable to the year of income. Where a person derives income in the capacity of trustee of a superannuation fund, tax is levied by section 121CA, 121CB, 121D, 121DA and 121DAB of Div. 9B of Pt III on income (section 121CA), income (s. 121CB), “investment income” (section 121D), and the amount (sub section 121DA and 121DAB) of a year of income. An amount on which tax is levied by these sections, other than section 121D, is by section 121DC deemed to be “taxable income”, and would for this reason be subject in any case of levy by virtue of section 17. Tax is imposed by the Income Tax (Companies, Superannuation funds and Corporate Unit Trusts) Act applicable to that particular year of ...