Taxation Summary

Income 的分类：

S6-5(1) cash benefit income under ordinary concept

S15-2 non-cash benefit, income. eg: allowance, free instalment, free lease,etc

S21AITAA36, it states that the non-cash business benefits that is not convertible to cash shall be treated as if were convertible to cash.

S15-15 statutory income --profit making undertaking or plan

Not apply to a profit under s6-5, or sale of property after 20 Sept 1985

S84-5(1) ITAA97 income that a taxpayer earns mainly as a reward for his/her personal effort or skills

Myer Eemporium is suitable for a business there is another activity carried on by the taxpayer.

案例：

The contract provided for the exclusive training contract for all new Australian based and recruited flight crew. This cost TCA Airways AUD $1,200,000 per annum, payable to VFA in a lump sum on 1 October of each year for five years. It was agreed between the parties that the annual lump sum will be paid into a VFA’s Australian bank account.

Normal proceeds

The issue to be discussed is whether the receipt from TCA is assessed as ordinary income or capital.

In Californian Copper Syndicate, assessable income includes income according to ordinary concepts, which is called ordinary income (s6-5). Normal proceeds from business operations are income from ordinary concepts.

In GP International Pipecoaters[1], the decision is that the money earned by tax payer by doing the work it had contracted to do and the payments were ordinary income. In this case, $1,200,000 p.a is received by VFA under the contract for training services, VFA earns the money by providing the services, thus, the payment is ordinary income.

In addition, according to GKN Kwikform[2], it illustrates the principle that the income of a business will include those receipts which are derived as regular, ordinary and expected incident of the taxpayer’s business. On that basis, it was clear that the lump sum of $1200,000 is payable each year for five years for...