Answering questions notes

1 Topics Covered: 1. GST 2. ITCs, Adjustments, and GST Accounting 3. Ordinary Income 4. General Deductions 5. Provisions that Deny or Limit Deductions 6. Depreciation 7. Trading Stock 8. Blackhole Capital Expenditure 9. Capital Gains Tax 10. Companies and Shareholders 11. Superannuation 12. Withholding Taxes 13. Total Tax Liability Calculation [email protected] Do not copy or distribute. This file is the property of "". Licensed to: [email protected].
2 CHECKLIST/ISSUE SPOTTING TP spends money (buys things, obtains services, pays for stuff) GST: - Does TP need to pay GST? - Is TP entitled to an ITC? Income tax : - Is TP entitled to a GENERAL deduction? - Is TP entitled to a SPECIFIC deduction? - Is TP entitled to a deduction for a DEPRECIATING ASSET under the capital allowance regime? - Check deduction EXCLUSIONS - Trading stock provision CGT - Does the expenditure form part of the cost base of a capital gain asset TP receives money (gets paid, sells something) GST: - Is TP liable to charge GST on the grounds? Income Tax: - Do the proceeds constitute part o f the TP's ordinary income? - Are the proceeds assessable as statutory income? - Are the proceeds non-assessable? - Does the TP include the proceeds from the sale/disposal of a depreciating asset as part of his assessable income or deduction? - Check: deduction exclusions CGT: - Does the receipt of money constitute a net capital gain for the TP? Follow the money a. If there is money, there must be tax implications b. Always start with GST [email protected] Do not copy or distribute. This file is the property of "". Licensed to: [email protected].
3 GST MONEY INCOMING (X HAS MADE A SUPPLY) Step 1: write this intro If [X] has made a taxable supply, it must charge [to the customer] and pay GST (to the ATO) (s9-40 GSTA; s7-1(1) GSTA). Step 2: It satisfies the positive elements: (Subdivision 9-A, s9-5) (is a taxable supply if) : Element 1: [X] made the supply for consideration (s9-5(a)) The supply of [...] (s9 -10 GSTA) is a - good (s9-10(2)(a) GSTA) - service (s9-10(2)(b) GSTA) - provision of advice or information (s9-10(2)(c) GSTA) - promise (Qantas Airways; ATS Pacific Pty Ltd) - lease - supply of money for a supply of money (loan in return for interest payments) (s9-10(4) GSTA) from [X], made for the consideration of [$ ...] (s9 -15 GSTA) to [Y]. - 9-10: what is supply (p 1774) - Any form of supply whatsoever s9-10(1) - Includes the supply of goods s9-10(2)(a), and services s9-10(2)(b) - Includes the provision of advice or information: s9-10(2)(c) - A promise is a supply (p 150) ( Qantas Airways ; ATS Pacific Pty Ltd) - Lease: generally be a supply whch occurs at the time of entering the lease 1. There will also be at least one other supply which occurs progressively throughout the term of the lease a. The observation by the lessor of the express or implied covenant of quiet enjoyment of the lease - Does not include a supply of money (eg buying things), unless it is a supply of money for a supply of money (e.g. a loan, in return for interest payments): s9-10(4) - Does not include court orders/fines/damages ( Interchase; Shaw) or out of court settlements (GSTR 2001/4 - ATO publication). 1. No 'supply' when you pay a fine, so no GST. - 9-15: what is consideration - Any payment/act/forbearance (9-15(1)(a)) in connection with a supply (s9-15(1)(b)) or in response to/for inducement of a supply of anything (s9-15(1)(c) - Does not matter whether payment was voluntary or whether it was by the recipient of the supply (s9-15(2) GSTA) - Does not matter if payment was in compliance with a court order (s9-15(2A)(a) GSTA) or legal settlement (s9-15(2A)(b) GSTA) [email protected] Do not copy or distribute. This file is the property of "". Licensed to: [email protected].
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