1.Pablo is a Portuguese resident employed by a Portuguese company.

The S45 of SITA is to withhold tax to payments made to non residents of Singapore.
November 18, 2020
Pablo is a Portuguese resident employed by a Portuguese company.
November 18, 2020

1.Pablo is a Portuguese resident employed by a Portuguese company.

1.Pablo is a Portuguese resident employed by a Portuguese company. He is sent to Australia to work on a short-term project to assist with the establishment of a branch office of the company in Australia. Pablo works in Australia for one month. Throughout this period, his salary was paid into his Portuguese bank account. During the year, he earned the equivalent of A$120,000 from his employment. Does Pablo have to pay Australian tax on any of hissalary?

2.Explain the respective outcomes reached by the courts in the following caseinvolving sales of land: Californian Copper Syndicate Ltd v Harris

3.Surfs Up P/L is a national retailer that sells a range of surfing and water sportsequipment (surfboards, clothing, etc.) with an annual turnover of $60 million. Surfs Up purchases “Billapro” surfboards for $440 each from Billapong P/L, a large manufacturer of surfboards located at Gold Coast with an annual turnover of around $45 million, this was their only sale for the month. Surfs Up plans to sell the Surfboards at a 200% mark-up to its customers.  In  October  last  year  it  purchased  370  surfboards  but  a  couple  of  months  later  (December)  they discovered  that  14  of  the  surfboards  were  faulty  and  subsequently  returned  these  faulty  surfboards  to  the manufacturer, obtaining a full refund. Assume both apply the accrual method of accounting.


Explain the GST consequences of this arrangement for both companies.

4.Melbourne Awesome Ltd supplies a wide range of folding bicycles. Melbourne Awesome Ltd derives Australian sourced income for the current tax year comprising net income from trading of $80,000, franked distribution from   public   companies   amounting   to   $28,000,   (carrying   an   imputation   credit   of   $12,000),   unfranked distributions from resident private companies amounting to $25,000 and rental income of $5,500. Melbourne Awesome Ltd also have total deductions (Business Expenses) totaling $55,000.


Calculate the net tax payable by All Sports Ltd for the year ended 30 June 2019. (Assume company tax rate is 30%)

5.Discuss the ATO’s ‘Test Case Litigation Program’

6.Richard is a retired solicitor. His wife Tracy is a retired school teacher. Both wish to remain active and they invest in a gift shop that is to be managed by their daughter Alice, who is aged 35. They form a partnership of three called “Alice’s Gift Shop”.Richard and Tracy contributed $40,000 each to fund the purchase of the shop. The partnership agreement provides:

  • Both Richard and Tracy are to receive interest at the rate of 10% p.a. on their capital contribution of $40,000.
  • Alice will receive a salary of $25,000 for the management of the shop, as well as superannuation contributions of$6,000.
  • A car will be leased by the business and provided to Alice.
  • All profits and losses are tobe shared equally between the threepartners.

The accounts for this income year show the following

:Income ($)Sales (excluding GST)240,000Expenses ($)Cost of goods sold130,000Interest on capital paid to Richard and Tracy8,000Salary to Alice25,000Superannuation to Alice6,000Lease payments on car (excluding GST)7,000Other deductible operating expenses (excluding GST)14,000The leased car was used 80% of the time for business and 20% of the time for private purposes.Required:With reference to the facts above:A.Calculate the net income of the partnership. B.Show the allocation of net income to each of the three partners. C.You must refer to relevant legislation and/or case law in your answers.

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