6 - Taxation - Taxation Learning objectives What are the...

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Taxation Learning objectives What are the different types of tax? What is income tax and how is it collected? How do I calculate taxable income and net tax payable? What are the different types of tax concessions? Who pays tax? Australian residents must pay for the income they earn regardless of… Non-residents pay tax for an income with Australian source WARNING: Australian resident for tax purposes =/= Australian citizen or resident for legal purposes (look at appendix) Tax and relevant government bodies ATO Administer taxation law by its own interpretation Income tax Collected via Pay As You Go System (introduced January 2000) How does it work? PAYG is treated as credit in tax payable
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1. Assessable income – mainly income & capital gain Includes 1. Wage, salary, bonuses, commissions, tips, dividend (different forms of income) 2. Capital gain Income is FULLY assessable ONLY 50% of capital gain is assessable if the asset was sold after holding for at least a year . Does NOT include exempt income, genuine gifts, hobby income (e.g. Exempt assets from capital gain tax are: 1. Main residence 2. Personal use asset (where price is less than 10000 dollars) 3. Hedging contracts 4.
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