Taxation Law RESEARCH ASSIGNMENT (30%)
This assessment is to be completed in groups of 4. For this assignment students are required to find and read in detail 3 article from taxation journals published between 2012 and 2017 (some tax journals are listed below). The topics that students may choose have to relate to the topics covered in the course. See next page for a list of topics. Students are then required to:
• Briefly summarise the issues identified in the article (300 words),
• Provide a critique of the article author/s viewpoint, in other words, provide your point of view on the issues raised in the article (500 words),
• Write a reflection of what you learnt from reading the article (200 words)

I will send you the rubric as well.
The total length of the assignment must not exceed 3000 words. Full references must be provided at the end of the assignment. Refer to the RMIT Business referencing guidelines document which can be downloaded from http://mams.rmit.edu.au/s9sx559hurvc.rtf. You must follow this guidance when referencing articles from the journal article you choose.
You may also want to look at the advice provided on http://www.citewrite.qut.edu.au/write/critique.jsp and on other such websites.

You must use the Word Document Template provided for this assignment. Failure to do so will result in loss of marks.
The teaching staff will endeavour to return the marked assignments in week 11 of the semester. The grading schema is at the end of this document.
Taxation and well as other journal articles can be accessed via the RMIT Library website. Taxation journals you can use for the assignment include:
• Australian Tax Forum
• Australian Tax Review
• eJournal of Tax Research
• Journal of Australian Taxation
• Revenue Law Journal
You may also use other relevant academic journals for the purposes of this assignment. Newspapers and non-academic source articles will not be accepted. If in doubt ask your tutor/lecturer.


Addition:
PRESCRIBED TEXTS AND REFERENCES
PRESCRIBED TEXT
You should not rely on old versions of the prescribed textbooks, due to constantly evolving case
law and legislation. Further, students are encouraged to search legal databases, the internet,
newspapers and journals as part of their ongoing research.
Prescribed Text
Sadique, Coleman, Hanegbi, Jogarajan, Krever, Obst, Teoh, and Ting. (2017). Principles of
Taxation Law. Thomson Reuters.
RECOMMENDED REFERENCES
(a) Nethercott, LJ, Richardson, G., Devos, K. Australian Taxation Study Manual, CCH, latest
edition
(b) Woellner, R, Barkoczy, S, Murphy S., Evans, C., Australian Taxation Law, CCH, latest
edition
(c) Australian Master Tax Guide, Latest edition, CCH

INTERNET RESOURCES
Australian Tax Office – www.ato.gov.au
Thomson ATP - http://www.thomson.com.au/tax/p_index.asp
CCH Australia Ltd – www.cch.com.au
Austlii - www.austlii.edu.au/
Tax and Accounting Sites Directory - www.taxsites.com/

STUDY PROGRAM AND MAIN TOPICS
1. Introduction to the Australian tax system, politics and reform.
2. Residence, source of income and derivation
3. Concepts of income – ordinary income and income from personal exertion
4. Concepts of income – business income
5. Capital gains tax
6. Fringe benefits tax
7. General allowable deductions
8. Specific deductions, trading stock and repairs
9. Capital allowances; capital works; tax offsets; medicare levy and taxation of individuals
10. Taxation of partnerships
11. Taxation of companies, taxation of dividends and the imputation system
12. Goods and services tax


Topic
1 INTRODUCTION TO AUSTRALIAN TAX SYSTEM, REFORM AND POLITICS
. Overview of the interaction between the ITAA (1936) and the ITAA (1997)
. Basic scheme of legislation.
. Sources of Tax Law.
. The Tax Law Improvement Project and the 1936 and 1997 Legislation.
. Tax Rates – Flat, Progressive and Regressive
. Role of Courts in Interpreting the ITAA
. Role of Income Tax Rulings
. Tax Persons
. The Tax Formula.
. General concept of income (introduction) – income compared with capital
. Examples of Receipts covered by the ITAA
. Examples of receipts not covered by ITAA
. The Distinction between Deductions and Rebates & Tax Offsets
. Medicare Levy
. Exempt income
. Not Assessable Not Exempt income
. Tax year, year of income
. Introduction to the Concept of Residence
• The politics of taxation and reform: refer to lecture material provided on Blackboard.

References:
Principles of Taxation Law, Sadiq et al 2017: Chapters 1, 2 and 3; and Blackboard resources

2 RESIDENCE, SOURCE and DERIVATION
. World income basis (Australia, USA, most countries) compared with territorial
basis (Hong Kong) and derived and remittance basis (Singapore and Malaysia)
. Global income tax system (Australia, Singapore, Malaysia, most countries)
compared with scheduler income tax system (Hong Kong)
. Residence of Individuals – common law and statutory meaning
. Residence of Companies – common law and statutory meaning
. Source of income - common law rules; statutory deeming provisions; employment
income, business income, dividend, interest and royalty income
. Exempt Income
. Withholding tax, foreign tax credits, role of double tax agreements
. Derivation of Income – cash and earnings basis; constructive receipt, trading
income - deferred payments, payments by instalment; income from professional
practices; fees in advance of goods or services; interest, rent, dividends, work in
progress
References:
Principles of Taxation Law, Sadiq et al 2017: Chapters 4 and 16

3 & 4 CONCEPTS OF INCOME
. General concepts of income – distinction between income and capital receipts
. Income from personal exertion – income from employment or in rendering
personal services - gifts, gambling receipts, compensation payments –
distinction between income and capital receipts; non-cash benefits received in
connection with employment – fringe benefits tax (topic 11)
. Income from personal exertion - income from carrying on a trade or business -
common law identification of a trade or business – badges of trade,
commerciality; distinction between income or capital receipts, mere realisation of
a capital asset or business proceed, gains made outside the ordinary course of a
business, compensation payments
. Non-cash benefits received in connection with employment
. Non-cash benefits received in connection a business relationship
References:
Principles of Taxation Law, Sadiq et al 2017: Chapters 5, 6, 7, 8 and 10

5 CAPITAL GAINS TAX
- Definition of Assets
- CGT events, CGT Assets
- Collectables, Personal Use Assets
- Acquisition and Disposal
- Taxation of Pre-CGT Assets
- Cost Base Rules, Reduced Cost Base
- Calculation of capital gains
- Exemptions, Main Residence rules,
References:
Principles of Taxation Law, Sadiq et al 2017: Chapter 11

6 FRINGE BENEFITS TAX
. Definition of Fringe Benefits, s.136, FBTAA, exempt fringe benefits, s. 58,
FBTAA
. Section 26(e), 26(e)(iv),(v), ITAA36; now s15-2, ITAA97 – allowances gratuities
arising from employment; exemption from s15-2 where benefit provided is a fringe
benefit as defined under s136, FBTAA (even if the fringe benefit is an exempt
fringe benefit), s23L(1), ITAA36.
. Section 21A, ITAA36 – non-cash business benefits
References:
Principles of Taxation Law, Sadiq et al 2017: Chapter 7.

7 ALLOWABLE DEDUCTIONS
. First Limb of section 8-1(1), ITAA97, sufficient nexus, inherent character of the
expense,
. Second Limb of section 8-1(1), ITAA97
. Negative Limbs of section 8-1(2), ITAA97 – capital, domestic private expenses
References:
Principles of Taxation Law, Sadiq et al 2017: Chapters 12 and 16

8 SPECIFIC DEDUCTIONS, SPECIFIC NON-DEDUCTIONS, TRADING STOCK
AND REPAIRS
. Specific deductions - business expenses, employee expenses, travel expenses,
motor vehicle expenses, entertainment expenses, club fees, professional
subscriptions, self education expenses, home office expenses, bad debts, theft,
misappropriation, borrowing and mortgage discharge expenses, legal expenses,
tax-related expenses, rates
. Limit on certain deductions
Specific non-deductions – entertainment and club expenses, fines, past year losses,
prior and current year company losses, non-commercial business losses, gifts,
payments to associated persons
. Repairs - definition of repairs, subsidiary compared with entirety, improvements,
capital issues involving repairs, part private use
. Meaning of Trading Stock
. Accounting for trading stock
. Value of trading stock at start of year and end of year
. Trading stock on hand
References:
Principles of Taxation Law, Sadiq et al 2017: Chapters 13 and 17

9 CAPITAL ALLOWANCES AND CAPITAL WORKS
. Definition of Depreciating Assets
. Cost of Depreciating Assets
. Car Limit
. Effective Life of Depreciating Assets
. Special Rates of Decline in Value
. Calculating Decline in Value of Depreciating Assets
. Pro Rating the Decline in Value
. Balancing Adjustments on Disposal
. Pooling of Depreciating Assets – low-value pools
. Deductions for capital expenditure on Buildings and Structural Improvements
References:
Principles of Taxation Law, Sadiq et al 2017: Chapter 14

9 TAX OFFSETS, TAX CREDITS, MEDICARE LEVY and TAXATION OF
INDIVIDUALS
. Tax offsets for dependants, definition of a dependant, spouse, invalid relative,
parent; adjusted taxable income
. Low income rebate
. Medical expense rebate
. Medicare levy
. Tax calculations and substantiation of expense claims
. Foreign tax offset
. Franked dividend imputation credit (topic 11)
References:
Principles of Taxation Law, Sadiq et al 2017: Chapters 3 and 15


10 TAXATION OF PARTNERSHIPS
. Definition of partnerships for taxation purposes
. Partnership elections
. Re-organisation, dissolution or changes in membership of a partnership
. Treatment of partners’ salaries and interest on capital
. Calculation of net partnership income
. Calculation of partner's individual tax liability
. Uncontrolled partnership income
References:
Principles of Taxation Law, Sadiq et al 2017: Chapters 3 and 19

11 TAXATION OF COMPANIES, DIVIDENDS, AND THE IMPUTATION SYSTEM
. . Definition of a company
. Public companies and private companies
. Reconciliation of accounting income and taxable income
. Prior year income and capital losses, transfer of losses, current year losses,
company bad debts
. Payments to associates
. Definition of dividends
. Deemed dividends
. Overview of imputation system
. Simplified imputation rules
. Franking mechanism
. Franking account, franking credits, franking debits, franking surplus,
franking deficit, franking deficit tax
. Imputation and the effect on shareholders
References:
Principles of Taxation Law, Sadiq et al 2017: Chapter 21

12 GOODS AND SERVICES TAX
. Overview of GST
. Creditable acquisitions & input tax credits
. GST free supplies
. Input taxed supplies
References:
Principles of Taxation Law, Sadiq et al 2017: Chapters 25 and 20