Tax Law Case Study

1132 Words5 Pages
TAX ADVICE ABOUT PAULINE’S TAX CONSEQUENCES Table of Content 1. Executive summary…………………………………………………………... 3 2. Introduction ………………………………………………………………….. 4 3. Analysis Pauline’s tax residency status……………………………………… 4 4. Tax consequence of Pauline’s source of income…………………………….. 5 5.1 Salary of $220,000 p.a……………………………………………………. 5 5.2 Airfare costs………………………………………………………………. 6 5.3 Accommodation costs…………………………………………………….. 6 5.4 Rental income……………………………………………………………... 6 5.5 Interest income……………………………………………………………. 7 5. Conclusion ……………………………………………………………………. 7 6. References ……………………………………………………………………. 8 1. Executive summary The aim of this report is to analysis of Pauline’s tax consequence if she chooses to work in Indonesia. This report analyzed Pauline’s tax residency status, source of income and her income categories. Meanwhile, the suggestions provided by this report are based on Australia’s Taxation Law and some relevant cases. This reports show that Pauline’s tax residency status will change if she chooses to work in Indonesia and the related income from Indonesia are no need to pay tax in Australia. However, her rental income and interest income that are from Australia will regard as the assessable income. 2. Introduction This report explains the effects of Pauline’s tax residency status if she chooses to work in Indonesia, and also analysis whether the incomes she earns in Indonesia are the assessable income in Australia. Then analyze and suggest how to pay tax on the rental income and interest income. At last give the conclusion of this report. 3. Analysis Pauline’s Tax residency status In this case, as Pauline is an individual, so according to S6 (1) of the ITAA 1963, we here use ‘domicile test’ to judge whether Pauline is a resident of Australia. As Pauline was born and lived
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