7 Income Tax Liability[ppt]

Foundations of taxation law 73f cch australia limited

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Foundations of Taxation Law [¶7.3](f) © CCH Australia Limited General deductions General deductions General deduction provision (s 8-1 ITAA97) Allows deductions for losses and outgoings to  the extent they are: incurred in gaining or producing the taxpayer’s  assessable income or  are necessarily incurred in carrying on a  business for the purpose of gaining or  producing the taxpayer’s assessable income However, certain losses or outgoings are not  deductible (eg capital losses and outgoings)
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Foundations of Taxation Law [¶7.3](g) © CCH Australia Limited Specific deductions Specific deductions Specific deductions are available under ITAA36  and ITAA97 for particular kinds of losses and  outgoings Checklist contained in Div 12 ITAA97 Examples: Tax-related expenses Repairs Borrowing expenses Bad debts Capital allowances Tax losses
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Foundations of Taxation Law [¶7.3](h) © CCH Australia Limited Limits on deductions Limits on deductions The general and specific deduction provisions  operate subject to a range of provisions in the  ITAA36 and ITAA97 which limit or deny  deductions
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Foundations of Taxation Law [¶7.4](a) © CCH Australia Limited Tax rates Tax rates Income tax is imposed on a taxpayer’s taxable  income at tax rates set out in the  Income Tax  Rates Act 1986 Individuals pay tax at progressive rates  (marginal rates) – different rates apply to  residents and non-residents Children are subject to penalty tax rates on their  “eligible taxable income” Companies pay flat rate of tax (generally 30%) Trustees of superannuation funds pay flat rates  of tax (generally 15%) 
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Foundations of Taxation Law Tax rates (individuals) Tax rates (individuals) Resident Individual Tax Rates for the 2009/10 Income Year Taxable Income Tax Payable 0 - $6,000 Nil $6,001 - $35,000 15% on excess over $6,000 $35,001 - $80,000 $4,350 on $35,000 plus 30% on excess over $35,000 $80,001 - $180,000 $17,850 on $80,000 plus 38% on excess over $80,000 $180,001 and above $55,850 on $180,000 plus 45% on excess over $180,000 Non-resident Individual Tax Rates for the 2009/10 Income Year Taxable Income Tax Payable 0 - $35,000 29% on excess over Nil $35,001 - $80,000 $10,150 on $35,000 plus 30% on excess over $35,000 $80,001 - $180,000 $23,650 on $80,000 plus 38% on excess over $80,000 $180,001 and above $61,650 on $180,000 plus 45% on excess over $180,000 [¶7.4](b)
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Foundations of Taxation Law [¶7.4](c) © CCH Australia Limited Tax rates (companies) Tax rates (companies) Most companies pay tax at a flat rate of 30%  (“general corporate tax rate”) Special rates apply to: Pooled development funds Life insurance companies RSA providers ADIs that are FHSA providers
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Foundations of Taxation Law [¶7.4](d) © CCH Australia Limited Tax rates (superannuation funds) Tax rates (superannuation funds) Trustees of complying superannuation funds 
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