TAXATION LAW – ASSIGNMENT QUESTIONS Essay Example

  • Category:
    Law
  • Document type:
    Assignment
  • Level:
    Undergraduate
  • Page:
    2
  • Words:
    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