An introduction to income tax law!

What is it all about?

No prizes for guessing it is mainly about income tax, but it also deals with some other revenue raising charges - you can see them listed in the table in Division 3-1

The key principal of the Act is found in Division 3-5

(1) Income tax is payable for each year by each individual and company, and by some other entities.
      1. Most entities have to pay instalments of income tax before the income tax they actually have to pay can be worked out.

So you have to pay income tax each year,

and you have to pay it before anyone has worked out how much you have to pay!

Doesn't that raise some rather important questions?

Yes! Those questions are spelt out for you in subsection 3 of Division 3-1.

(3) This Act answers these questions:

        1. What instalments of income tax do you have to pay? When and how do you pay them?

          2. In other words, how do they work out how much money to take from you before anyone has worked out how much tax you have to pay? You will find the answer in section 750-1.

        2. How do you work out how much income tax you must pay?

The most important question of all - how do they work out how much you have to pay! See Division 4, starting at section 4-1.

3. What happens if your income tax is more than the instalments you have paid? When and how must you pay the rest?

See Division 1 (sections 204 to 220) of Part VI of the Income Tax Assessment Act 1936.

4. What happens if your income tax is less than the instalments you have paid? How do you get a refund? See section 750-20.

If they take too much they have to give some back, and if they don't take enough, they have to get the rest of it from you!

5. What are your other obligations as a taxpayer, besides paying instalments and the rest of your income tax?

See section 3-10.

6. Do you have any other obligations under the income tax law?

See section 3-15.

7. If a dispute between you and the Commissioner of Taxation cannot be settled by agreement, what procedures for objection, review and appeal are available?

See Part IVC (sections 14ZL to 14ZZS) of the Taxation Administration Act 1953.

If you disagree with the calculation of tax made by the Tax Commissioner, you have a right to get it reviewed by a higher authority!

 

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