Taxation Law Overview

These flashcards cover key terms and definitions relevant to taxation law in Australia, focusing on the sources of tax law, taxation mechanisms, and specific laws and percentages pertinent to taxpayers.

Power to Tax

Originates from the Constitution, which outlines the distribution of taxing rights.

Fringe Benefits Tax Assessment Act (FBTAA) 1986

An Act that applies to employee benefits.

Income Tax Assessment (ITAA) 1936

Primary legislation that measures taxable income.

Medicare Levy (ML)

A levy calculated at 2% of taxable income to fund Australia's universal health care system.

Taxable Income

Assessable income minus allowed deductions.

Fringe Benefits Tax (FBT)

Tax levied on benefits provided to employees, excluding salary and wages.

Statutory Income

Amounts included in assessable income due to specific provisions in legislation.

Ordinary Income

Income derived from ordinary concepts, including salaries, wages, and interest.

Tax Offsets

Reductions in tax payable, differing from deductions which reduce taxable income.

Capital Gains Tax (CGT)

Tax on capital gains, applicable when a CGT event occurs.

Private Rulings

Rulings given to taxpayers upon request, binding on the Commissioner.

Public Rulings

General guidance on tax law interpretations by the Commissioner, binding on the Commissioner.

Income Tax Rates for Foreign Residents

Progressive tax rate structures that do not benefit from lower marginal tax rates or tax-free threshold.

Exempt Income

Income that is not subject to tax under legislation.

Tax Administration Act 1953 (Cth)

Contains administrative rules for tax collection and penalties.

Self-Assessment System

Taxpayers assess their own tax liabilities and comply with tax laws.

Superannuation Guarantee (SG)

A mandatory employer contribution to an employee's superannuation fund.

Commonwealth Parliament

Has authority under Section 51 (ii) to make laws regarding taxation.

Medicare Levy Surcharge (MLS)

An additional charge for taxpayers above a certain income threshold without private health cover.