(1) Why are the concepts of 'residence' and 'source' important?
(2) What are the general jurisdictional rules? Discuss some of the exceptions to these rules.
(3) In what circumstances are individuals and companies treated as residents of Australia?
(4) Kit is a permanent resident of Australia. He was born in Chile and retains his Chilean citizenship. Kit spends most of the year working off the coast of Indonesia on an oil rig for a United States company. He was recruited for this job in Australia and signed a contract with the company here. For the last four years, Kit's wife has lived in Australia with their two children. They purchased a home in Australia three years ago. Kit and his wife have a joint account with Westpac Bank. Kit's salary is paid directly into this account. All of the family's other investments, including a share portfolio that generates dividend income, remain in Chile. Kit gets one month off from work every third month and, on these occasions, he meets with his family either in Australia or on holidays around South America (usually in Chile where his parents reside). Discuss whether Kit is a resident of Australia and how his salary and investment income would be taxed.
(5) Pablo is a Portuguese resident employed by a Portuguese company. He is sent to Australia to work on a short-term project to assist with the establishment of a branch office of the company in Australia. Pablo works in Australia for one month.
Throughout this period, his salary was paid into his Portuguese bank account. During the year, he earned the equivalent of A$120,000 from his employment. Does Pablo have to pay Australian tax on any of his salary?
(6) What is the purpose of having special rules that apply to temporary residents?
7) Jean-Claude is a temporary resident who derives both Australian and foreign source income. How is this income taxed?
8) Discuss the definition of a 'permanent establishment' in s 6(1) ITAA36. Why is this concept important? See further questions 16 and 38 from the ATSM.
(9) John is a senior executive with a printing company. As part of his remuneration package, his employer pays for his child's school fees at a private school costing $15,000. His employer also provides him with accommodation in a Sydney apartment throughout the FBT year. John must pay $100 of rent per week for the apartment.
The market value rent for the apartment is $800 per week. Advise John's employer of the FBT consequences of John's remuneration package. [1120.10], [1120.11]
(10) What are the consequences if an employer elects to use Div 9A FBTAA to calculate the taxable value of a meal entertainment fringe benefit? [g20.15]
(11) Discuss the five different ways in which the taxable value of car parking fringe benefits may be calculated. [1120.17]
(12) Gerry is employed by a furniture retailer. Gerry's employer allowed him to purchase floor stock for $2,200.The same floor stock would ordinarily be sold to customers for $8,800. What is the taxable value of this fringe benefit? [1120.18]
(13) Penny is employed as a secretary by a law firm. As part of her remuneration package, the firm agrees to provide her with legal services in relation to her divorce at a 60% discount to normal rates. The firm also purchases a plasma TV set for $5,500, which it gives to Penny. Explain how the taxable value of these fringe benefits is calculated.
(14) Provide some examples of residual fringe benefits. [1120.19]
(15) Discuss the relaxed FBT rules under Pt XIA FBTAA. In what circumstances will employers rely on these rules? [1120.20]
(16) What is the purpose of the FBT rebate in s 65J FBTAA? [1120.21]
(17) Discuss the role of s 67 FBTAA. [1120.22]
(18) How does TR 2001/10 distinguish between effective and ineffective salary sacrifice arrangements? [1120.23]
(19) Discuss how employers convert the cost of fringe benefits into equivalent salary amounts. [T20.23]
(20) Ted owns a milk bar. The fridge he uses to store soft drinks in broke down earlier this year. He contacted his friend Sam, who is an electrician, to repair the fridge. Sam spent two hours fixing the fridge. Sam's ordinary hourly rate is $110. However, instead of paying Sam $220 for his services, Ted and Sam agreed that Ted would provide him with soft drinks worth $220 rather payment in cash. Assuming both parties are registered for GST, advise them of the GST implications of this arrangement. Would your answer be different if Sam repaired the fridge for free?
(21) Explain the different ways in which entities attribute GST and input tax credits under the cash and accruals basis of accounting.
(22) On 1 January 2000, Ted entered into a 15-year lease of a commercial office building at a monthly rental of $5,000. Discuss how the lease payments are treated under the GST law.
(23) A large Australian law firm rendered an $11,000 tax invoice at the end of January last year to a large public company for legal work that it had performed. The client paid this bill in two equal instalments in April and August last year. Explain how each entity should account for GST and input tax credits.
(24) How does the GST law deal with deposits?
(25) What are 'increasing adjustments' and 'decreasing adjustments' and why is it necessary to account for these under the GST system?
(26) Fred purchased rocks from Barney for use in his gardening business for $11,000 (inclusive of GST). The rocks turned out to be of a poor quality and Fred sued
Barney for damages. The matter was eventually settled by Barney paying Fred $4,400. Explain how the GST law applies to the settlement.
(27) Wonder Sports is a large sports goods retailer. It purchases 'sweet spot' tennis racquets for $110 each from Aussie Tennis Goods, a large manufacturer of tennis products. Wonder Sports plans to sell the tennis racquets at a 200% mark-up to its customers. In January last year it purchased 100 racquets. However, in April, it discovered that 10 of these racquets had design faults and it returned them to the manufacturer and obtained a full refund. Explain the GST consequences of this arrangement for both parties.
(28) Explain how the payment, refund and reporting mechanisms operate under the GST law.
(29) What is a 'tax invoice' and why is it important to hold a tax invoice?