Taxation policy in Australia case study

This used to happen where one would be taxed the country where they are situated and still be taxed again where bringing the fruits of their investment back to their county. As such, it would be seemingly costly to entrepreneurs and investors who would be charged a lot to transact the business. To illustrate the workability of the term permanent establishment, we can suppose a citizen of Australia has a business permanently established in the UK, and then the taxes implication would come from the government of UK where the business is situated (Cevik & Miryugin, 2018). It seeks to answer the question of who should benefit and for what. Normally, the government collects levies for services they have offered as a good infrastructural department and even providing security and a conducive environment for business (Dabner, 2002).

This is because the house will be permanently placed in the USA for the whole time he intends to lease it and also that the house enjoys amenities from the American government. The government of Australia on the other hand, although it has signed this law with many countries, including the USA will also receive a tax("Tax on income and capital gains," 2018). This is because the country views this as income tax and this not as profit. As an income, Australia will tax Andrew. The first strand as is termed in the decisions made by the court on FC of T v The Myer Emporium Ltd 87 ATC 4363is the first and convenient provokes relied on to came up with the decision the court came with ("Legal Database", 2018).

Therefore, he sought requiring him to pay the tax for the sale of land was in practice and unfair interpretation of the constitution. The taxpayer los the case and was required to pay the tax. These two cases represent substantive extension into the definition of incomes and how each participant should conduct themselves in business dealing (Dabner, 2002). Both cases seem to have a collision between the interest rates. Suppose the selling price of the piece of land was the same as the land was bough, would the taxpayer go an extra mile in digging into their pocket to be able to pay the taxes. As such this section discusses the capital gain realised over time and the one gain considering taxation laws of Australia.

On the three shares investments mentioned above, the Australian government will impose a 30% tax on the capital gain which is the same as the dividends that the shareholders are entitled to. As such, from our gross capital gain, we will subtract 30% of [(10,000-500) + (10,000-1000) + (750-2500)] = 30% 16750 = 5025. Although the gain in 2500 shares is a loss, the government will not necessarily give a business that has made losses some money, but instead, will make the business pay less when combined with other portfolios or in the subsequent taxation years, which is referred to as ‘carry forward company losses ("Tax on income and capital gains", 2018). Otherwise, these shares would have even franked before the actual sale which would mean we deduce not the tax, and however since they are in their raw value and not in dividend then the general assumption is that they are not yet franked, after franking, their value not rests at a value less by $1200.

As such, it is important to consider the interests on loans, not to say that the tax should be deducted in totality to cover the entire interest, but to a considerably enough rate. Interests levied are liable to business, and once the transactions are done, the company remains liable to pay the government its due tax (Dabner, 2002). This is regardless of whether the business stops later or continues in practice. Further, another thing is the use of situations to determine whether a specific situation is tax deductible or not. Each specific case is different in its own making and the players, and therefore individuals should strive to make sure the company adhere to the law of taxation. Further, the government should be considering setting its tax rates for people who have capital sources from loans slightly lower.