# TAXATION LAW – ASSIGNMENT QUESTIONS Essay Example

• Category:
Law
• Document type:
Assignment
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2
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930

Question 1:

1. An Australian individual who is a resident with a taxable income of \$15,000

According to tax rates-resident table for 2015-2016, taxable income between 0 – \$18,200 attracts nil tax. Therefore, \$15,000 is below the \$18,200.

There will be not tax payable.

1. An Australian individual who is a non-resident with a taxable income of \$15,000

Since foreign residents are not obligated to pay the Medicare levy, the \$15,000 falls short of 2015-2016 minimum threshold to be taxed (it is below 0-\$80,000).

There will be not tax payable.

1. An Australian company with a taxable income of \$15,000

In the year 2015-2016 Australian Tax Office noted that in that income year, the small business company tax rate was to stand at 28.5%. This percentage was to cover companies that had turnover which was less than \$2million and other companies with this turnover were to pay 30%. With a taxable income of \$15,000 at the end of trading period the income tax payable was:

(\$15,000×28.5%)/100%

Income tax payable=

1. An Australian individual who is a resident with a taxable income of \$155,000

 Taxable income Tax on this income For the first \$18,200 There will be no tax (below the \$18,200) \$18,201to \$37,000 It attracts \$18,800 x 19% = \$3,572 \$37,001 – \$80,000=32.5%(80,000-37,000) It attracts = \$43,000 x 32.5% = \$13,975 plus \$3,572 \$80,001 – \$155,000=37%(155,000-80,000) It attracts = \$750,000 x 37% =\$27,750 plus \$17,547

Total tax from \$155,000

 \$27,750 +3,572+17547
1. An Australian individual who is a non-resident with a taxable income of \$155,000

 Taxable income Tax on this income 0 – \$80,000 80,000×32.5=\$26,000 \$80,001 – \$180,000 75,000x37c for each \$1 over \$80,000=\$27,750 plus 26,000

Total tax from \$155,000

 \$27,750 +26,000
1. An Australian company with a taxable income of \$155,000

In the year 2015-2016 Australian Tax Office noted that in that income year, the small business company tax rate was to stand at 28.5%. This percentage was to cover companies that had turnover which was less than \$2million.

(\$155,000×28.5%)/100%

Income tax payable=

1. An Australian individual who is a resident with a taxable income of \$255,000

Taxable income

Tax on this income

For the first \$18,200

There will be no tax (below the \$18,200)

\$18,201to \$37,000

It attracts \$18,800 x 19% = \$3,572

\$37,001 – \$80,000=32.5%(80,000-37,000)

It attracts = \$43,000 x 32.5% = \$13,975 plus \$3,572

\$80,001 – \$\$180,000=37%(180,000-80,000)

It attracts = \$100,000 x 37% =\$37,000 plus \$17,547

\$180,001 and over (255,000-180,000)

It attracts 45c for each \$1 over \$180,000 (45,000×45)= \$20250 plus

Income tax payable=

 \$150,463
1. An Australian individual who is a non-resident with a taxable income of \$255,000

 Taxable income Tax on this income 0 – \$80,000 80,000×32.5=\$26,000 \$80,001 – \$180,000 100,000x37c for each \$1 over \$80,000=\$37,000 plus \$26,000 \$180,001 and over 45c for each \$1 over \$180,000 (45×75,000)=\$33,750 plus \$63,000
 +100,000 \$196,750
1. An Australian company with a taxable income of \$255,000

In the year 2015-2016 Australian Tax Office noted that in that income year, the small business company tax rate was to stand at 28.5%. This percentage was to cover companies that had turnover which was less than \$2million.

(\$225,000×28.5%)/100%

Income tax payable=

1. An Australian company qualified as a “small business entity” with a taxable income of \$100

The small business company tax rate was to stand at 28.5%. This percentage was to cover companies that had turnover which was less than \$2million.

(\$100×28.5%)/100%

Income tax payable=

Question 2:

1. An Australian resident, aged 25 years, with a taxable income of \$18,000

To begin with, the Australian resident does not need to pay Medicare levy because the taxable income for 2015/2016 did not exceed his/her Medicare levy threshold.

Medicare levy =\$0.0

Medicare levy surcharge

(\$18,000 taxable income + NIL reportable fringe benefits) = \$18,000×0% (Single threshold base tier)

Medicare levy=\$0.0

Medicare levy surcharge=\$0.0

Medicare levy and Medicare levy surcharge payable for the year ended 30 June 2016

1. An Australian resident, eligible for a Seniors tax offset, with a taxable income of \$32,000

The Australian resident does not need to pay Medicare levy because the taxable income for 2015/2016 did not exceed his/her Medicare levy threshold.

Medicare levy =\$0.0

(\$32,000 taxable income + NIL reportable fringe benefits) = \$32,000×0% (Single threshold base tier)

Medicare levy and Medicare levy surcharge payable for the year ended 30 June 2016

1. An Australian resident, aged 45 years, with a taxable income of \$45,000

The Australian resident does not need to pay Medicare levy because the taxable income for 2015/2016 did not exceed his/her Medicare levy threshold.

Medicare levy =\$0.0

(\$45,000 taxable income + NIL reportable fringe benefits) = \$45,000×0% (Single threshold base tier)

Medicare levy and Medicare levy surcharge payable for the year ended 30 June 2016

1. A taxpayer who is not a resident for tax purposes, with a taxable income of \$45,000

In this case, non-residents are not entitled by the law to pay Medicare levy but they will have to claim an exemption from medicare entitlement statement.

(\$45,000 taxable income + NIL reportable fringe benefits) = \$45,000×0% (Single threshold base tier)

Medicare levy and Medicare levy surcharge payable for the year ended 30 June 2016

1. An Australian company with a taxable income of \$2,500,000

Based on 2015 to 2016 income year, the small business company tax rage was pegged at 28.5 percent for companies in Australia with turnover that was less than \$2 million. On the other hand, there was 30 percent for all other companies in Australia with threshold or taxable income more than \$2 million.

In this case, the levy will be:

(2,500,000 x 30)/100

\$750,000

Other levy is pegged at 2% of the total taxable income

(2,500,000 x 2)/100

Total tax

 \$750,000 \$800,000