MACQUARIE UNIVERSITY

FACULTY OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING
AND CORPORATE GOVERNANCE

BUSL320 - REVENUE LAW
Session 1 - 2013

Written Report Cover Sheet

Family Name | Lei | Given Name(s) | LingYun | Student ID | 42248981 | Tutor’s Name | Peter Crowfoot |

DECLARATION

I certify that:

* This assessment is my own work, based on my personal study and/or research;I have acknowledged all material and sources used in the preparation of this assessment, including any material generated in the course of my employment;

* If this assessment was based on collaborative preparatory work, as approved by the teachers of the unit, I have not submitted substantially the same final version of any material as another student;

* Neither the assessment, nor substantial parts of it, have been previously submitted for assessment in this or any other institution;

* I have not copied in part, or in whole, or otherwise plagiarised the work of other students;

* I have read and I understand the criteria used for assessment – (see pages 8 – 10 of the BUSL320Assessment Guide);

* The assessment is within the word and page limits specified in the unit outline;

* The use of any material in this assessment does not infringe the intellectual property / copyright of a third party;

* I understand that this assessment may undergo electronic detection for plagiarism, and a copy of the assessment may be retained in a database and used to make comparisons with other assessments in future. Work retained in a database is anonymous and will not be able to be matched to an individual student;

* I take full responsibility for the correct submission of this assessment in the appropriate place with the correct cover sheet attached and I have retained a duplicate copy of this assessment

DATE : 2013 03 18

SIGNATURE (or by uploading this file I agree to the declaration above)

Executive summary

In this case, Pauline is a sales manager works in the head office of Paper Producers Pty Ltd in Sydney. The company provided a new offer for her which requires her to work overseas at least for 2 years with an option to stay for 2 more years. The offer commences from 1 March, 2013 if she accepts it. The details of new remuneration package and relative tax problems will be explained in this report.

Introduction

This report is to detailing the Australia income tax implications to Pauline if she agrees to work overseas. The key problem is to identify whether Pauline is a resident or not. The reason is if she is not a resident of Australia, she does not need to pay tax for her overseas income. Then all of her incomes will be listed, classified and explained. Recommendation will be given based on her situation.

Is she a resident?

Across the sec. 6 (1) ITAA36-definition of ‘resident’, there are 4 alternative test to identify whether a person is a resident or not. (Barkoczy, 2013: 1265).

1. The Common Law Test
If a person’s family or business is in Australia, all his or her assets are set in Australia, and his or her social and living activities are in Australia, generally, this person will be regards as a resident. Pauline’s family is in Australia, she has a home in Sydney and she works there as a manager of the company. She is resident. However, if she accepts the offer, her family will move with her, her home will be rented out and she will work in Indonesian for 2 years. She could be a non-resident of Australia.

2. The Domicile Test
Woellner et al (2013: 1248) state that the person stills a resident of Australia, if he or she domicile in Australia, unless the person has a permanent place of abode outside Australia. Pauline was born and lived all her life in Sydney. Follow the case Henderson v Henderson², Pauline is attributed a domicile of origin. Nevertheless, if she agrees to work in Indonesian, she could have a permanent place of abode outside