Australian Taxation Law - Oxford University Press

1 Australian Taxation LawCelebrating its 25th edition, this leading annual tax text for students and practitioners provides a comprehensive analysis of relevant legislation, case law and rulings, and a conceptual framework within which to assess topical tax issues. 2015 Australian Taxation Law covers income tax, superannuation, the goods and services tax, fringe benefits tax and state and flowcharts, practical examples and sample calculations are included to assist the reader in understanding the key principles. The work also includes a section of tax rates and tables for reference purposes and a Key tax websites table which lists useful and popular websites for tax practitioners and covered include.

2 Operation of the current tax system and options for reform Income, deductions and offsets Capital gains tax Partnerships Trusts - including trust streaming Corporations and shareholders Dividend imputation system Consolidation rules Tax accounting Capital allowances Small business Taxation Financial transactions International tax including transfer pricing rules Debt/equity and thin capitalisation Tax avoidance including Pt IVA Superannuation Fringe benefits tax Goods and services tax Returns, assessments and appeals Collection of tax including PAYG ATO investigations, offences and penaltiesOUP ANZ SAMPLEDCCH AUSTRALIA LIMITEDDate: 11-DEC-14 Time: 9:09 Seq: 2 AcknowledgmentsRobin Woellner dedicates this book to Gil, Glad, Ruth, Sally, Helen and Cheryl;Stephen Barkoczy to Mei-Ling, Stephen and Johnny;Shirley Murphy to Bill and Marjory;Chris Evans to Kate Collier;and Dale Pinto to Dudley, Dagmar, Catherine, Joseph and disclaimerNo person should rely on the contents of this publication without first obtaining advice from a qualifiedprofessional person.

3 This publication is sold on the terms and understanding that (1) the authors, consultantsand editors are not responsible for the results of any actions taken on the basis of information in thispublication, nor for any error in or omission from this publication; and (2) the publisher is not engaged inrendering legal, accounting, professional or other advice or services. The publisher, and the authors,consultants and editors, expressly disclaim all and any liability and responsibility to any person, whether apurchaser or reader of this publication or not, in respect of anything, and of the consequences of anything,done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole orany part of the contents of this publication.

4 Without limiting the generality of the above, no author,consultant or editor shall have any responsibility for any act or omission of any other author, consultant in Australia by McPherson s Printing GroupOUP ANZ SAMPLECCH AUSTRALIA LIMITEDGPO Box 4072, Sydney, NSW 2001 Head Office North RydePhone: (02) 9857 1300 Fax: (02) 9857 1600 Customer SupportPhone: 1 300 300 224 Fax: 1 300 306 Code: 39907 AAustralian Taxation Law25th Edition2015 Woellner Barkoczy Murphy Evans PintoOUP ANZ SAMPLEDCCH AUSTRALIA LIMITEDDate: 11-DEC-14 Time: 9:09 Seq: 4 About Wolters Kluwer, CCHW olters Kluwer, CCH is a leading provider of accurate, authoritative and timelyinformation services for professionals across the globe.

5 We create value by combininginformation, deep expertise, and technology to provide our customers with solutionsthat contribute to the quality and effectiveness of their services. Professionals turn tous when they need actionable information to better serve their the integrity and accuracy of over 45 years experience in Australia and NewZealand, and over 175 years internationally, Wolters Kluwer is lifting the standard insoftware, knowledge, tools and Kluwer, CCH When you have to be publicationsTo keep readers abreast of changes to the income tax law, Wolters Kluwer, CCHpublishes a wide range of print and electronic services. These include the AustralianFederal Tax Reporter (and its companion service, the Australian Federal Income TaxReporter, which covers the Income Tax Assessment Act 1997), the Australian Master TaxGuide, Foundations of Taxation Law, the Core Tax Legislation & study Guide, theAustralian Taxation study manual , and the Australian Tax all the Wolters Kluwer, CCH publications in this area, contact Wolters Kluwer,CCH Customer Support on 1300 300 224 or refer to the catalogue on the WoltersKluwer, CCH website at 978 1 925159 67 7 ISSN 1324-809 XFirst edition.

6 September 1987 Sixteenth edition ..December 2005 Second edition ..February 1990 Seventeenth edition ..December 2006 Third edition ..December 1990 Reprinted ..March 2007 Fourth edition ..January 1993 Eighteenth edition ..December 2007 Fifth edition ..December 1994 Nineteenth edition ..January 2009 Sixth edition ..January 1996 Reprinted ..June 2009 Seventh edition ..January 1997 Twentieth edition ..December 2009 Eighth edition ..December 1997 Reprinted ..July 2010 Ninth edition ..December 1998 Reprinted ..September 2010 Tenth edition ..November 1999 Twenty-first edition ..December 2010 Eleventh edition ..December 2000 Twenty-second edition ..December 2011 Twelfth edition.

7 December 2001 Twenty-third edition ..December 2012 Thirteenth edition ..December 2002 Twenty-fourth edition ..December 2013 Fourteenth edition ..December 2003 Twenty-fifth edition ..December 2014 Fifteenth edition ..December 2004 2015 CCH Australia LimitedAll rights reserved. No part of this work covered by copyright may be reproduced or copied in any form or byany means (graphic, electronic or mechanical, including photocopying, recording, recording taping, orinformation retrieval systems) without the written permission of the ANZ SAMPLEDCCH AUSTRALIA LIMITEDDate: 11-DEC-14 Time: 9:09 Seq: 5vForeword to the first editionIf two of the important criteria of a good Taxation system are simplicity andcertainty ( 1-190 and 1-195), the Australian Taxation system and particularly theIncome Tax Assessment Act 1936 fail the test miserably.

8 The spate of anti-avoidancelegislation, a reaction to the excesses of the tax avoidance era of the seventies, and themore recent Taxation reform package have brought about legislation of almostunrivalled legislation is in some cases unintelligible: without a commerce or law degree theordinary taxpayer stands no chance of finding his way through the morass and evenwith these qualifications his advisers will of necessity have to struggle to make senseof language that is as convoluted as it is confusing. Nor is the task of the taxationofficer any easier. Many provisions in the legislation are not applied for the simplereason that no one is able to comprehend them.

9 The need for a work that will operateas a guide to the traveller through these murky waters is painfully 1946, Mr Hannan, in his Treatise on the Principles of Income Taxation , whileadverting to the desirability of enunciating a series of authoritative propositions (on s51(1)), resignedly accepted the impossibility of such a task. Some 40 years on, thepossibility of formulating authoritative principles on any matter relating to tax iseven more daunting. The torrent of decisions, judicial and administrative, that hasbeen handed down over that time, together with the outpourings of the legislature,have made the study of Taxation almost need for a systematic approach to the study of Taxation is obvious enough to thestudent.

10 If the student were to see Taxation as involving no more than an endless seriesof individual instances no overview of the subject would be possible. But it is not onlythe student who is in need of a systematic approach to the problem. The practitionerwho is unaware of the system will have endless difficulty even finding the problem,let alone proceeding to a solution for that it is not the student alone who will benefit from the present work. Indeed there areto be found discussed in these pages many of the great Taxation issues of the present,without an appreciation of which it would be impossible to predict the outcome ofparticular factual way of example, no issue could be more significant in the judge-made law ofincome Taxation than the issue of the role of purpose in s 51(1) of the Act.