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Week 01 LEGT2751 Notes
1.4 INCOME TAX FORMULA AND CALCULATION OF TAX PAYABLE ss4, -5, -10, -15 - Shows how to calculate tax, and who should pay tax s36-10 - Explanation of a tax loss s251S – Medicare levy

Tax formulas [2.2-2.3] income tax = (taxable income x tax rate) – tax offsets

Tax offsets – eg imputation credit from share trading, listed in s13-1

taxable income = assessable income - deductions

• Assessable income = ordinary income – statutory income o Ordinary income s6-5 – assessable income according to ordinary concepts o Statutory income s6-10 – assessable income according to provisions • General deduction – s8-1, specific deductions – s8-5

Types of income [2.14] • If an amount is both …show more content…

Common law test – focus on where on resides
2. domicile test – born here, or shows intention of permanent stay
3. 183-day stay test
4. superannuation test

• residency determined on an annual basis

Residency of companies • co is incorporated in AUS • carries on business in AUS + central mgmt and control in AUS • voting power controlled by residents in AUS

Income Source Rules • wages, salaries and contractual payments o based on where work is done, not where contract is executed/payments • income from trading activities o based on place of the sale contract • interest o place where credit is provided

1.6

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