Taxation Systems for Business Entities Why do we tax business entities instead of just taxing their owners?
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Taxation Systems for Business Entities
- Why do we tax business entities instead of just taxing their owners?
- What is the difference between the 'corporate taxation' model and the 'flow-through' model of entity taxation?
- What are the major differences between the 'classical' system of company taxation and the 'imputation' system?
- What entities fall within the definition of 'company' for taxation purposes?
- Are partnerships 'companies' for taxation purposes?
- What is a non-entity joint venture?
- Why are clubs taxed as companies (assuming that they are not exempt from tax under a specific provision of the Acts anyway)?
- When will a company be 'resident' in Australia for income tax purposes?
- When will a company 'carry on business in Australia'?
- What is meant by 'central management and control'?
- How can a company have dual residence?
- If a company has dual residence how is its tax liability determined?
- What are the major differences in the ways in which companies and individuals are treated for taxation purposes?
- How would you tell whether a company is public or private for taxation purposes?
- Briefly explain the '20/75 rule'.
- Briefly explain the two (2) circumstances in which companies can carry forward losses and offset them, for taxation purposes, against later year profits? Provide a section reference/s.
- How do you determine whether a company satisfies the 'same owners' test?
- When do you use the 'primary test' and when do you use the 'alternative test'?
- What is the 'primary test'?
- What is the 'alternative test'?
- In determining whether a company satisfies the 'same owners' test what is the 'ownership test period'?
- What is the significance of the 'ownership test period' in determining whether the company satisfies the 'same owners' test?
- What is the 'same business' test?
- Briefly explain how the 'same business test' has been interpreted by the courts and by the Commissioner.
- In determining whether a company satisfies the 'same business' test what is the 'same business test period'?
- In determining whether a company satisfies the 'same business' test what is the 'test time'?
- In determining whether a company satisfies the 'same business' test what is the 'same business test period'?
- In determining whether a company satisfies the 'same business' test what is the relationship between the 'test time' and the 'same business test period'?
- What is the effect of s 165-210(3) on the 'same business' test?
- A buys all the shares in X Ltd from B in December of tax year 1. Over the ensuing 6 months X Ltd trades badly and loses $100,000. In desperation A decides to change what X Ltd does and the change of business proves successful. In tax year 2 X Ltd makes a profit of $200,000 from its new operations. Can X Ltd write off the year 1 loss against the year 2 profit? Under what provision?
- What conditions must be fulfilled before any taxpayer can claim a deduction for bad debts which he/she has written off?Provide a section and/or case reference/s.
- What additional conditions must be fulfilled by a company taxpayer seeking a deduction for bad debts which it has written off? Provide a section reference/s.
- In what way are public and private companies treated differently for the purposes of obtaining deductions for bad debts written off during a tax year? Provide a section reference/s.
- To which entities does the consolidations regime apply?
- A Ltd is the head company in a company group consisting of the following companies:
- B Ltd, a resident company in which A Ltd owns all of the shares;
- C Ltd a non-resident company in which A Ltd owns all the shares;
- D Ltd a resident company in which A Ltd owns 90% of the shares; and
- E Ltd, a resident company in which A Ltd owns 80% of the shares and B Ltd owns 20% of the shares.
- Which companies can be members of the consolidated group? Why?
- How do companies enter the consolidations regime?
- What are the disadvantages of not coming within the consolidations regime?
- What is the effect of consolidating for tax purposes on the income tax liability of the head company and each of the subsidiary members?
- What is the effect of consolidation on the taxation of any intra-group dividends?
- What is the effect of consolidation on the franking accounts of each of the members of the group?
- What is the effect of consolidation on the FBT liability of each member of the group?
- A Ltd, a resident company, receives a $100,000 fully franked dividend from B Ltd, another resident company. What is A Ltd's tax liability in respect of that dividend? Why?
- C Pty Ltd, a resident company receives a $50,000 unfranked dividend from D Ltd. What is its tax liability on that dividend receipt? Why?
- E Pty Ltd lends its sole shareholder and managing director $100,000. What are the taxation consequences for:
a. E Pty Ltd;
b. the managing director?
- F Pty Ltd pays the wife of its managing director $100,000 a year for her services as a casual filing clerk. How are these payments treated for taxation purposes?
- What things are included in the ITAA's definition of 'dividends'?
- In the context of s 44 what is the difference between 'profits derived by the company' and 'income of the company'?
- If a company earns taxable income of $100,000 in a particular tax year and pays tax at the company tax rate of 30% what entry will be made in its franking account.
- When will that entry be made?
- How do you calculate the 'gross up' of a dividend received by a shareholder?
- Which shareholders are required to 'gross-up' their dividend income?
- How do you calculate the offset to which a shareholder might be entitled as the result of receiving a franked dividend?
- In what cases will non-resident shareholders be entitled to that offset?
- Fred, a non-resident, receives a $70 fully franked dividend from BHP. What is his Australian tax liability on that dividend?
- Fred also receives a $70 unfranked dividend from Telstra. What is his Australian tax liability on that dividend?
- What offset are resident companies entitled to in respect of their Australian sourced dividends?
- G Ltd receives a fully franked $70,000 dividend from H Ltd. What is its income tax liability on that dividend? What happens to the franking credits?
Related Book For
Business Ethics Ethical Decision Making & Cases
ISBN: 978-1439042236
8th Edition
Authors: O. C. Ferrell, John Fraedrich, Linda Ferrell
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