LAWS20060 Taxation Law of Australia
Term 1 2016
Due date: Tuesday 3 May 2016 11:45 PM AEST
Weighting: 40% – This assignment is worth 40 marks in total.
Length: 1 500 – 3 000 words. Marks awarded to each question are indicative of the amount of information required to comprehensively answer the question.
While the assignment is largely based on material covered, you are free to research and seek advice as widely as you find necessary – there are no limitations as to sources. However, sources should be appropriately referenced.
The assignment is to be submitted online in Moodle. Submission must consist of one document only. This document must be in Word format only ie .doc or .docx. Required file name: student surname_student number_LAWS20060_ASSESS1
The method of referencing to be used in this assignment is the American Psychological Association (APA) referencing method. Additional information regarding this method is available through the library and the Academic Learning Centre. When making a reference, cite the original source or authority in preference to a secondary source such as the textbook, especially when you are discussing various sections of legislation. This means you should make reference to legislation, cases and Tax Rulings as a priority to back up any arguments that you make in your assignment.
QUESTION 1 (Total 20 marks)
Please read Taxation Ruling TR 2009/5 and answer the following questions. Taxation Ruling TR 2009/5 can be found on the ATO website at www.ato.gov.au .
(a) Seller Pty Ltd makes a payment of $10 000 to Buyer Pty Ltd to cover the cost of in-store promotional activities relating to its products. What effect will this payment have on the cost of trading stock that Buyer Pty Ltd purchases from Seller Pty Ltd?
(b) What is the appropriate tax treatment of the payment mentioned in (a) above in the hands of Buyer Pty Ltd and Seller Pty Ltd?
(c) Seller Pty Ltd provides a volume rebate discount of 10% when Buyer Pty Ltd purchases more than $50 000 worth of product in a calendar month. Buyer Pty Ltd has qualified for this discount ten times in the past twelve months.
What are the tax implications of the information given in (c) above?
(d) Refer to the information given in (c) above. As a condition of claiming the volume rebate discount Buyer Pty Ltd is also required to lodge a rebate claim form each month before the end of the month. Buyer Pty Ltd often neglects to lodge the rebate claim form. What are the tax implications of this action? (5 marks each)
QUESTION 2 (20 marks)
Jojo spends between 15-20 hours per week writing blogs about saving money. She has a part time job to supplement her income, teaching money management at evening classes and works Wednesdays and Thursdays at the local cafe. Jojo does not have a formal business plan but tries very hard to promote her blogs. She is widely known and recognized in her local town because some of her blogs are printed as columns in the local newspaper. She has won four prizes from writing competitions. Jojo has a Master’s degree in creative writing graduating two years ago. In the two years since graduating she has earned advertising revenue from her blog sites amounting to between $8,000 and $10,000 per year with her writing related expenses typically around $6,000 a year. Jojo works from a granny flat on her property and all her blogs are kept on sites which she actively promotes through social media. Jojo is a diligent bookkeeper and keeps record of all her writing related income and expenses. She is a member of two professional writing associations and has been reviewed on a number of other websites to which she is unrelated.
Discuss the factors that will be taken into consideration by the ATO in determining if Jojo is conducting a business or not and their likely decision.
Do not exceed the word limit if you can possibly avoid doing so. You may find that you have written too much so it is probably worthwhile to edit your assignment so that it is more tightly structured. Some of the information you have included in the text may be better placed in footnotes.
These criteria are a general guide as to the standard expected at the various levels. Characteristics indicative of the respective levels of achievement in the assignment are as follows. It is not necessarily the case that all these criteria will be met at a particular standard as there may be a superior performance on one of the criteria and not so satisfactory performance on another.
High distinction standard
• The answer is very well written and clearly expressed
• There is a demonstrated appreciation and understanding of the issues involved
• The answer is well structured and logically organised
• Demonstrated mastery of referencing system
• There is evidence of a comprehensive analysis of the issues
• Conclusions are backed by well-reasoned arguments demonstrating a detailed insight and analysis of issues
• Comprehensive coverage of all relevant issues
• References are made to the appropriated legislation for particular issues
• Statutory provisions are analysed and interpreted correctly
• The legislation is applied to the particular fact situation in a competent manner
• Consideration is given to the operation of the common law
• There may be consideration of issues not raised in the tutorials and answer guides
• The answer is well written and expressed
• The answer is structured and logical
• The issues have been reasonably well identified and appreciated
• There is correct use of referencing
• Issues have been analysed
• Reference is made to all appropriate legislation, although the analysis and interpretation is not as detailed and reasoned as for the high distinction standard
• The effect of the common law is considered
• There is a comprehensive coverage of the issues
• Occasional errors of law and legal reasoning may still be present
• The answer is generally well written and expressed
• The answer is structured and sequential
• Referencing is satisfactory
• Issues are identified and addressed
• There has been an attempt to analyse some of the issues
• The coverage of issues is reasonably comprehensive often with a good treatment and analysis of particular points
• Errors of law and incorrect reasoning may sometimes be present
• Statutory interpretation may require improvement
• Depth of treatment is often lacking in some of the issues
• Pass standard
• The answer is able to be followed and understood
• The answer could perhaps be better organised and structured
• The referencing may need improvement
• Issues may need to be identified and addressed in more depth
• Analysis when present may be incorrect
• Some familiarity with the legislation and its application is demonstrated
• Sometimes the conclusions reached are simple
• There may be several errors of law
• There may be quantities of material of marginal relevance included in the answer
• The answer may be significantly short of the required length
• The written expression is poor and difficult to understand
• The answer is poorly organised
• There has been a failure to identify and address the issues in the question
• Referencing is generally inadequate
• There is a lack of familiarity with the legislation and its appropriate application
• The reasoning and application demonstrated is poor
• Frequently there is much irrelevant material
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