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7 Income Tax Liability[ppt]

Pay tax at the rate of 15 on the low rate component

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pay tax at the rate of: 15% on the “low rate component” of the fund’s  taxable income  45% on the “non-arm’s length component” of the  fund’s taxable income  31.5% on the fund’s “no-TFN contributions  income” Trustees of non-complying superannuation  funds pay tax at a flat rate of 45% on the fund’s  taxable income
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Foundations of Taxation Law [¶7.5](a) © CCH Australia Limited Tax offsets Tax offsets Checklist contained in s 13-1 ITAA97 Tax offsets are subtracted from income tax  payable on taxable income Generally, tax offsets cannot be refunded  (subject to some exceptions, eg franking credits  are refundable)
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Foundations of Taxation Law [¶7.5](b) © CCH Australia Limited Common tax offsets Common tax offsets Family, social and work related offsets: Dependants tax offset   (s 159J ITAA36) Low income earners tax offset   (s 159N ITAA36) Medical expenses tax offset (s 159P ITAA36) Pensioner and beneficiary tax offset (s 160AAA  ITAA36) Senior Australians tax offset (s 160AAAA  ITAA36)
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Foundations of Taxation Law [¶7.5](c) © CCH Australia Limited Common tax offsets (cont) Common tax offsets (cont) Incentive-related tax offsets: Superannuation tax offset (Subdiv 290-D and  Div 301 ITAA97) Entrepreneurs’ tax offset (Subdiv 61-J ITAA97) Film production tax offset (Div 376 ITAA97) Credit-related tax offsets: Franking credit (s 207-20(2) ITAA97) Foreign income tax offset (Div 770 ITAA97)
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Foundations of Taxation Law [¶7.6](a) © CCH Australia Limited Medicare levy Medicare levy Imposed on resident taxpayers under the  Medicare Levy Act 1986  at the rate of 1.5% Levy is not payable by: companies  superannuation funds  non-residents prescribed persons Levy is also not payable where taxable income  is below certain thresholds
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Foundations of Taxation Law [¶7.6](b) © CCH Australia Limited Medicare levy surcharge Medicare levy surcharge Imposed at the rate of 1% on a person’s  “income for surcharge purposes” for any period  during an income year that the person is not  covered by private health insurance Surcharge applies if the person’s “income for  surcharge purposes” (or, if the person is  married, the person’s and his or her spouse’s  “income for surcharge purposes”) exceeds:  For single persons without dependants, $70,000  For single persons with dependants and for  married persons, $140,000 (increased by $1,500  for each dependent child after the first child) 
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Foundations of Taxation Law [¶7.7](a) © CCH Australia Limited The HELP system The HELP system Contained in  Higher Education Support Act Higher Education Loan Program (HELP)  provides loans to fund tertiary education HELP debts are indexed annually until repaid
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