Essay about Determining Assessable Income

2498 Words10 Pages
Introduction.
Individuals thrive off producing income in order to meet their day-to-day needs and wants. Tax is imposed on these income producing activities to provide the government revenue. This involves identifying the various ranges of assessable income. The legal question which must be addressed is any of the income that was earned by these individuals assessable income under the Australian income tax assessment act? To answer this question, we must determine if a nexus exists between Australia and the person(s) being taxed by applying the concepts of Residency, Source and Derivation.
1. Residency.
Residency is important because it is the basis as to how the government will tax individuals.
S6-5(2) and s6-5(3) ITAA97 states
…show more content…
In this case, the taxpayer was a Greek national resident in Australia employed by a Greek Press and Information Service located in Sydney which was an instrumentality of the Greek Ministry of Foreign Affairs. A position in Greece was applied for but was not appointed until after she had migrated to Australia. She became a permanent public servant of the Greek Government upon taking up the position and behaved as a consulate employee. Her income was subject to tax in Greece. The Greek Government forwarded her salary to the Sydney office after deductions had been made for tax and superannuation.
It was held by the court that according to s.23(q) of the Income Tax Assessment Act 1936 the income of the taxpayer was derived from a source within Australia, as such, would be subject to Australian taxation laws.
The taxpayer in this instance was sourcing income from Australia. The destination where payment was originating from becomes unimportant. Regardless of the fact that the employing entity is, or is not an Australia resident nor does it have to be situated in the same country. In contrast, it is where the relevant work was performed that becomes the main focus to determine assessable income.
2.1.1.1 Income derived from work performed in Dubai.
Applying this reasoning to Melinda and Aaron, although the contract made with Jacobs, Sly & Bennett was signed in Australia and payment of

More about Essay about Determining Assessable Income

Get Access