Week 1 - Australian Taxation Law and the Administrative Framework

Flashcards cover key concepts from Week 1 lecture: tax law forms, Acts, residency tests (ordinary concepts, domicile, 183 days, super), resident vs foreign resident tax rules, referencing standards, rulings, notices, and ATO processes.

What are the three main forms of tax law in Australia?

Legislation (the income tax acts), case law (precedent), and rulings by the Australian Taxation Office (ATO), including public and private rulings.

Which two acts form the core tax legislation for this course?

Income Tax Assessment Act 1936 and Income Tax Assessment Act 1997.

What does self-assessment mean in the Australian tax system?

Taxpayers assess their own tax payable; the ATO can audit later; penalties can apply for incorrect self-assessment.

What is the ordinary concepts test in determining tax residency?

The primary residency test based on intention to reside, family, assets, work, and social ties; if satisfied, the person is a resident.

What is the correct order of applying the four residency tests?

Start with ordinary concepts; if not satisfied, apply domicile; then the 183-day test; finally the superannuation test (rarely used).

What factors are most important under ordinary concepts for residency?

Intention to reside is most important, followed by family, then employment, assets, and social ties.

In the Bjorn case example, which factors indicated residency and which indicated non-residency?

Residency indicators: selling car, redirecting mail, intention to stay 18 months, family in Australia, children in school. Non-residency indicators: keeping his house in Sweden, leaving after four months.

What does the 183-day test state for residency?

If you are present in Australia for more than 183 days in the tax year, you are typically a resident for tax purposes (with exemptions for working holidays).

What is the domicile test and when is it used?

Domicile assesses where you intend to make your permanent home; used after ordinary concepts if residency is unclear; Applegate v FCT is a key case.

What is the superannuation test in residency?

An automatic tax resident if the person is a member of a Commonwealth public service superannuation fund; rarely used in practice.

How are residents versus foreign residents taxed on income?

Residents are taxed on worldwide income; foreign residents are taxed only on Australian-sourced income.

What are the common section references for income and expenses in tax questions?

Income references: section 6-1; Expenses (deductions) references: section 8-1; both cited from the relevant acts.

What is a private ruling versus a public ruling?

Public rulings provide guidance for the public; private rulings apply to specific taxpayers and their circumstances.

What is a notice of assessment?

The ATO's formal determination of tax payable after lodging a return, usually signed by the Commissioner.

What is the function of double taxation agreements (DTAs) and foreign tax offsets?

DTAs prevent double taxation by allowing offsets for foreign tax already paid; foreign tax offsets reduce Australian tax accordingly.

What is PAYG withholding?

Pay as you go; system where tax is withheld from wages or paid by businesses periodically (monthly/quarterly).

What is AustLII and how is it used in tax referencing?

AustLII is an online legal database used to access the Income Tax Assessment Act sections (e.g., 6-1, 8-1) for reference.