Taxation Law

RESIDENCY

1 What are the jurisdictional links used for imposing income tax in Australia?

2 Explain why Applegate was not a resident for the purposes of the Income Tax Assessment Act in the case of FCT v Applegate.

3 Are the following residents of Australia for income tax purposes? If you need more information indicate the information needed.

(i) Clodhoppers Ltd, a footwear company incorporated in Malaysia opens a branch office in Melbourne.

(ii) Alpha Beta Pty Ltd is a company incorporated in Australia. It is a wholly owned subsidiary of a Singaporean Company. Alpha Bet carries on no business in Australia.

(iii) A company incorporated in Singapore to carry out merchandising activities in Singapore has its central management and control in Sydney. Its voting power is controlled by Australian residents. Would your answer differ if its central management and control was in Singapore, but its voting power was still in Australia?

4 Do questions 4 and 5 in chapter 14 of Barkoczy, page 255

SOURCE

5 Why is source important for income tax purposes?

6 Joanne is a nurse living in Carlton. She is a resident of Australia. She sees an advertisement in the paper asking for expressions of interest for nurses to work on a U.S. base in Saudi Arabia. Joanne responds to the advertisement and is later offered a 3 year contract. Joanne accepts. Her employer is an employment agency operating out of Melbourne. She leaves Australia on 1 July 2007. She comes back every 3 months to see her family (free air travel is provided for her to travel home). Joanne has her salary paid into her Australian bank account.

Where is Joanne's salary sourced?

7 Smutty Stuff is an American Rap 'artist'. Smutty receives considerable airplay in Australia. Australian Royalty Collection Agency receives royalties from radio stations each time an artist's song is played. Smutty receives a royalty of $10,000 from ARCA. All recordings made by Smutty are made in America, and all recordings are pressed in America. Indeed, Smutty has never been outside America and rarely ventures outside New York.

Can Australia tax the $10,000?

DERIVATION

8 Why is derivation important for tax purposes?

9 Do questions 3 and 4 chapter 17 of Barkoczy, page 383.