代写Introduction to the Australian Tax System
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•Australian Taxation Law
–Introduction to the Australian Tax System
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•Chapter references Overview and Structure of Tax Law
•Chapter 1: Sources of Tax law (pre reading material)
•Chapter 2: Study Skills (pre reading materials)
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•Objectives
•Understand background and history to tax legislation in Australia
•Understand the role of the courts and tax office in interpreting legislation
•Understand the purpose of the Income Tax Assessment Act 1936 and 1997 and legislation relating to GST and FBT
•Understand subsidiary legislation eg Taxation Administration Act, International Agreements Act, Rates Act, Regulations and Schedules
•Understand tool used by ATO and taxpayers to interpret legislation eg rulings, determinations, Interpretative Decisions and Practice Statements
•Understand the hierarchy of the Court system and Tax System
•Understand that tax law is forever changing eg Henry Review, carbon tax
•The key players in the Australian Tax System
•The tax payer
–Two roles
•Pays tax
•Collects tax on behalf of the ATO (GST)
•The registered tax agent
•The Australian Tax Office
•The National Tax Practitioners Board
•Inspector General of Taxation
•Board of Taxation
•Other Government bodies
•The Tax Process in Australia
•The taxpayer required to lodge a tax return based on notice in Gazette
•The lodgement process
–Types of tax payers
–Self
–Via tax agent
•Self assessment process
–Onus on taxpayer
–Subsequent audit by ATO
–Pre fill reports
•Issue of refund or notice to pay
•Agree or disagree
•Objections
–Amended assessment
–Time period to request amendment or lodge objection
•See page 749 for diagram of process
•Where does Tax Law come from?
•Introduced by Parliament
•Constitution
–Basis of legislation
–Section 51(ii) of the constitution gives the Commonwealth the power to “make laws for the peace, order and good Government of the Commonwealth with respect to….Taxation”
–Taxation is a compulsory exaction of money by a public authority for public purposes enforceable by law and not a payment for services rendered.
–Power to levy income tax and to pass laws relating to the collection of tax and other administrative issues
–Section 90 of the Constitution gives the Commonwealth the exclusive power to impose customs and excise duties
–Under s 55 of the Constitution, one Act to deal with assessment and collection of income tax and another to deal with the rate of tax paid
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•Three levels of taxes in Australia
•Commonwealth
–Purpose of taxes
•Fund certain social/government obligations
•State
•Local
•Commonwealth Taxation
•1942 - Uniform taxation - Commonwealth Government
•Prior to that date - States levied taxation on income from individuals, companies and property
•Commonwealth needed to raise revenue for World War II
•State Taxes
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•These differ in each State
•In Victoria examples are:
•Pay-roll tax - differs between States
•Victoria – 4.90% if pay-roll over $550,000
•Land Tax – based on value of land other than family home if above $250,000
•Stamp Duty - tax on documents, Transfer of Land, Mortgage, Hire of equipment.
•Local Government
•Tax based on land value of property in Municipality
•Tax called “Rates” - average cost $1,800 pa
•Services such as garbage collection, street lighting, street cleaning, public libraries, services to the elderly and handicapped
•No Taxes for the following currently
•Death duty - but capital gains tax applies in certain circumstances as a result of death
•Gift duty
•Inheritance tax
•Sales tax – now replaced by GST (consumption tax on goods and services)
•Sources of Tax Law
•Statutory Law(Income Tax Assessment Acts) - enacted by Parliament
•Common Law or Case Law - made by the Judges - Commonwealth Courts and State Courts
•Administrative statements - Rulings by the Australian Taxation Office (ATO)
•Key Income Tax legislation
•Income Tax - Income Tax Assessment Act 1936 and Income Tax Assessment Act 1997
•Reason for 2 Income Tax Assessment Acts
–Tax law Improvement Project
–Plain English
• Structure of Act
–ITAA 1936 divided into Parts I to XII plus schedules, then divisions and then subdivisions
–ITAA 1997 s divided into Chapters which consist of parts
•Interaction between the 2 Acts
•Both Acts used to determine taxable income
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•Other tax legislation
•Schedules
•Regulations
–Prescribe how parts of the Act are to be implemented
•Income Tax Rates Act
–Set the rates of tax
•Taxation Administration Act
–Offence provisions, PAYGW rules, objections, reviews and penalties provisions
•International Agreements Act
•Fringe Benefits Tax Assessment Act
•Goods and Services Assessment Act
–Impact on income and expenditure
•Taxes by another name
•Income tax (tax on income and net capital gains)
•Levy
•Surcharge
•Fringe Benefits tax (tax on benefits provided to employee by employer
•Goods and Services Tax (GST) tax on use or consumption (end user pays)
•UNDERSTAND WHERE THEY FIT IN AND WHO IT IMPACTS ON
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•Australian Tax Office
•Main role is to administer the Income Tax System
•Website address is www.ato.gov.au
ATO does this by issuing :
•Rulings public and private, which are interpretation or opinion of the law,
•Determinations which address only 1 tax issue without a comprehensive analysis of the impact on tax,
•Practice Statements are internal ATO documents which give directions to ATO staff on the approach they should take in carrying out their duties
•Interpretative Decisions are the Commissioner’s view on the interpretation of the law on particular issues
•ATO – PRIVATE RULINGS
•If a taxpayer has uncertainty as to the application of the tax law they can apply for a ruling on how the ATO would apply the law to the transaction. Binding on the ATO
•Oral rulings on simple matters given over the telephone
•Private rulings for just the individual taxpayer - full disclosure required
•ATO – Public Rulings
•Public rulings - these rulings published for all taxpayers. These set out the ATO’s view on the way a provision of the Act should be applied. Binding on the ATO
•Product ruling - these apply to specific investment schemes and arrangements
•Any dispute with a ruling the courts make the final decision
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•Interpretation of Legislation
•To impose a tax the legislation must be precisely expressed:
•If it is unfair but clear then the liability will stand
•If it is ambiguous then the law is interpreted in favour of the taxpayer
•Form v substance
–If the transaction is entered into in accordance with the law irrespective if it affects the amount of tax payable , the transaction stands,
–If you look beyond the actual documentation and look at the purpose then the transaction will be struck down
•Role Of The Courts
•Hierarchy of the Courts (see page 742 of textbook)
•Assessment is raised,
•If the taxpayer objects to the ATO’s assessment, then objection
•If objection disallowed
•Then taxpayer takes matter to the Administrative Appeals Tribunal -AAT
•Role of Courts continued
•If taxpayer has a serious legal issue then takes it to the Federal Court
•Appeal from a single Judge of the Federal Court a full bench - three Judges
•Then if not happy with the decision to the High Court if leave to appeal allowed
•It is the decision of the final court that matters not the accumulation of judges for and against that determines the matter.
•SELF – ASSESSMENT PROCESS
•All taxpayers self-assess their own tax liability and lodge a tax return each year
•Use of pre fill reports issued by ATO
•All taxpayers have a Tax File Number -TFN as well as an ABN if conducting a business
•Australian Taxation Office - ATO - accepts all tax returns and BAS on face value.
•Refunds and additional liability processed immediately
•Self-Assessment continued
•Self-assessment cost effective as ATO does not need to check all tax returns
•ATO conducts audits if anything unusual appears on the tax return
•Audits are also being conducted on BAS
•Audits are also conducted on occupation specific groups
•All taxes under self-assessment - income tax for individuals, companies, GST, FBT
•ATO - AUDITS
•ATO relies on computer software to identify any irregularities in tax returns
•ATO will advise public each year that certain occupation group will be looked ta closely eg teachers, accountants, lawyers trades people.
•Specific targets - businesses that handle a lot of cash
•Audit starts with a letter or telephone call and the taxpayer responds
•If more serious then ATO has power to enter premises and seize documents
•ATO AUDITS continued
•ATO wider powers than in criminal cases
•Power to enter premises without warning
•Power to seize documents and other information such as a list of clients
•ATO given assistance by Australian Federal Police in serious cases
•All government agencies provide information to ATO
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•FRAUD AND EVASION
•This constitutes criminal activity and prosecuted under the Crimes Act
•Usually takes the form of not declaring cash earnings which constitutes money laundering
•Penalties include the payment of tax, interest and penalties - 100% of tax and also terms of imprisonment
•TAX AVOIDANCE
•Not a criminal offence - usually involves a scheme to minimise tax
•Be aware of anti avoidance provisions eg Part IVA
•If taxpayer has a reasonably arguable position then no penalties just tax plus interest - GIC
•If Court decides in favour of ATO then tax plus penalties up to 100% of tax and interest
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