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Taxation Law - Week 1 Question

Since Alex is a resident of the UK for the tax purposes therefore, he shall be a foreigner for Australia for tax purposes. As per the question, his assessable income from Australian sources is $90,000 in 2019/2020.

a) The taxable income is the total amount of income calculated after deducting the allowed deductions as per the ATO rules i.e. Total Income – Deductions.

Thus, in the instant case, the taxable income of Alex shall be $90,000 for tax purposes in Australia as according to the question he is not allowed to any deductions.

Taxable income of Alex = $90,000 - $0 = $90,000.

b) According to ATO rules, if the income of foreign resident lies in the income threshold of $0 to $90,000 then the income rate shall be 32.5% of the total amount more than $0.

As per above answer the taxable income of Alex is $90,000 and the amount of tax payable by Alex is to be calculated at 32.5% as his inc....