ACC708 Taxation Law
FBT Revision Questions
Question 1:
Aussie (P) Ltd. provided a facility of the gymnasium to its worker Julie without charge|for complimentary|for gratis} and therefore the cost of that gymnasium package is $ 1950 to the corporate. As Julie is receiving this profit without charge and no quantity is paid by her as a contribution, it’ll be assumed because the Fringe edges Tax (PBT) and can be dutiable within the hands of the corporate (FBT Act, 1936). it’s conjointly thought that Aussie is entitled to induce the input reduction of GST therefore it’ll be grossed through the upper rate.
| Particulars | Amounts $ |
| Value of benefit | 1950 |
| Gross up | 2.0647 |
| Taxable value | 4026 |
| Tax rate | 46.5 |
| Tax obligation | 1872 |
In this case, $ 1950 could be an internet price that needs gross-up with higher rates (2.0647 in 2013), and taxes on such gross prices are going to be paid by the corporate.
Question 2:
This case is expounded to associate expense payment benefit that refers that if associate leader reimburses the expenditure of associate worker that was spent to his personal use, are going to be assumed as FBT and dutiable within the hands of the leader. in keeping with this regulation of the FBT Act 1936, the dutiable price of a benefit is going to be the number that’s reimbursed by the leader to its worker. within the gift case, the dutiable price is going to be 4200. Grossed up dutiable price is going to be as below:
| Particulars | Amounts $ |
| Value of benefit | 4200 |
| Gross up factor | 2.0802 |
| Gross Taxable value | 8737 |
| Tax rate | 47 |
| Tax obligation | 4106 |
As the company is eligible to require the deduction of GST, a gross-up is going to be created with a better price to balance the tax payment. within the current case, the dutiable price of the profit is going to be the particular quantity that is paid by the leader to Julie.
Question 3:
Reimbursement of private expenses sort of an account, servant salaries, etc. square measure assumed as FBT below the perimeter edges act is paid by the leader to its worker. The existence of the employer-employee relationship is critical to spot the FBT. Gross-up of profit is subjected to the GST provisions associated with a leader, United Nations agency isn’t entitled to induce the GST credit, can gross up the profit with a lower rate of gross-up.
| Particulars | Amounts $ |
| Value of benefit | 6000 |
| Gross-up factor in 2014 | 2.0647 |
| Gross Taxable value | 12388 |
The current case is expounded to private expense compensation {in that|during which|within which} the dutiable price of the profit are going to be capable the number which is paid by the leader to associate worker in compensation. As Aussie (P) Ltd is allowable to require the input credit, the gross-up can is formed with a better gross-up issue that is two.0647 for the year 2014.
Taxation Law
As per the taxation Laws to Australia, a visitor visiting Australia is liable to pay tax. However, there are certain aspects of that are being checked to ensure the fact that the tax liability being imposed is at par the guidelines of Australian taxation laws.
