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ACCT90016
Taxation for Business Decision Making

Group Assignment
Lisa Greig
Subject Coordinator

Department of Accounting
Faculty of Business and Economics
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Instructions – Please read carefully
Submission Checklist

o This assignment must be submitted no later than 11.59pm AEST
on Sunday, 15 September 2024.
o Only one group member who is nominated as the submitter will
submit the assignment on behalf of the group.

o You must attach a Group Assignment ‘Submission Cover Sheet’
(download template from the Assignment tab under Modules on the
LMS subject page) to the front of your answer. Any answers
submitted without the ‘Submission Cover Sheet’ duly completed
may not be assessed. Students should read the Declaration on the
Submission Coversheet carefully prior to submitting your
assignment.

o You are required to submit your answer as a Word document (not
PDF).

o Where approval for late submission has not been given, any late
assignment will be graded up to a maximum of 15 marks.

o You must keep a copy of your assignment as you must be able to
produce a copy of your assignment at the request of your seminar
leader at any time after the submission due date.
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1. Objectives
The objectives of this assignment are to:
• Expand your knowledge of areas covered in this subject
• Develop critical thinking and problem solving
• Develop written communication skills and teamwork

The assignment attempts to provide you with the opportunity to address some ‘real
world’ taxation issues and get you thinking like a professional tax advisor.
2. Grading

This assignment represents 30 percent of the overall assessment in this subject. Marks
will be awarded based on the following criteria:
(a) Identification of issues.
(b) Identification of appropriate primary sources of law i.e., legislation and cases, and
secondary sources e.g., ATO guidance (if any) to support your argument.
(c) Application of identified primary and secondary sources to the facts in the
question.
(d) Evidence of research beyond materials covered in the seminars to answer the
questions.
(e) Strength and reasonableness of your argument and conclusion.
(f) Accuracy of calculations and legal references.
(g) Clarity of writing and structure of your analyses.

3. Word Limit – per question or section.

Students are required to state their word count on the assignment coversheet. The word
limit will be strictly enforced per question as stated. Any excess will not be marked and
not contribute to answer.

Note that your word count includes all letters or words in your answer (e.g., headings,
citations, titles, section references, footnotes, etc). Only the coversheet and any
calculations (if necessary) do not form part of your word count.

There is no minimum number of words required. However, the word limit should be
used as a guide for the level of detail required to adequately address the issues raised
in the assignment problem.
Give reasons for your advice. If you need more facts, be sure to indicate those
that are needed and consider the potential tax consequences if those facts apply
You are expected to consider alternative consequences where a particular
consequence is not clear or straightforward.
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4. Groups

The assignment may be done in groups of 2 to 4 with the maximum of 4 students in
any one group. The group may consist of students from different seminar streams.
Group members are expected to take equal responsibility for the completion of the
assignment. Students are strongly advised to attempt the whole assignment individually
and then work together to finalise the whole assignment. Failing to do so is likely to mean
that you may not have sufficient feedback about your individual performance level as
well as risk being less prepared for the exam.
5. Format

The font size of the body of the answer must be no less than 12 points, and the font size
of footnotes must be no less than 10 points.

Use headings and subheadings where appropriate. Do not:
• Provide diagrammatical illustrations.
• Repeat the facts of the assignment.
• Provide a bibliography.
• Provide the full text of provisions of the legislation; or
• Restate the full facts of a case unless necessary to illustrate a point being made.
6. Late submission, extensions, and special consideration

Late submission of assignments may attract a 5% penalty per day unless an extension
has been granted.
Important: Please to Paragraph 11 of the Subject Guide if you wish to apply for
assignment extension or special consideration where you have exceptional reasons
outside your control. Please do not submit your request to the subject coordinator
directly to avoid delays in your application.

The Assignment & Results Policy (MPF1326) item 4.119 allows the Faculty to award
assignment extensions of up to 10 business days. All extensions are provided in
business days, noting that public holidays, where the university is closed, do not count
towards the 10 business days. The default for all assignment extensions of 10
business days will not be granted due to the associated feedback to assist with the final
assessment preparation.
7. Academic integrity, plagiarism, and collusion
All sources used for your answer to the assignment must be referenced. This is to
acknowledge that your material is not based entirely on your own ideas, but is based, in
part, on the ideas, information and evidence of others. Plagiarism and collusion are
considered academic misconduct and attract severe penalties. More information is
available on the University’s Academic Integrity website via
http://go.unimelb.edu.au/rha6.
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Work submitted to this subject will be subject to Turnitin similarity checks. Turnitin is an
online, web-based software that works by comparing electronically submitted papers
billions of pages of content located on the internet and proprietary databases as well as
the work of all students whose papers have also been submitted into the system.

8. Working in groups and contributions

Students are expected to take equal responsibility for the completion of the assignment.
If you have difficulty with a member of your group, you should contact your subject
coordinator as soon as possible. Do not leave issues unresolved until just before or
after your group assignment is due.

The subject coordinator may organise a peer evaluation and reserve the right to mark
the group members differently using his or her discretion. Students who do not
contribute collaboratively to a group assignment may be allocated a lower mark or
assigned a mark of zero.

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Questions
This assignment contains 3 questions.

Question 1 (worth 15 marks) – Word Count of 2,000 will be strictly enforced
A famous case in Australia tax law the Addy Backpacker tax case.

In 2017, Catherine Addy, a UK citizen, was in Australia on a working holiday visa and
worked as a waitress. The Commissioner of Taxation applied the tax rate for Working
Holiday Makers ("backpacker tax") instead of the tax rate for an Australian resident.

Addy argued that this tax treatment violated a non-discrimination clause in the double
taxation agreement between the UK and Australia. She contended that, as a UK citizen,
she should not be taxed more heavily than an Australian resident performing the same
work.

The case escalated to the High Court of Australia, which ruled in Addy's favour in 2021.

Your task:
Research the Addy cases as they progressed through the hierarchy of the courts.
Explain the tax issues and demonstrate your understanding of how they have been
applied in this case.
Your response should cover the following:
1. Advise on the residency rules and how they apply to the facts in Addy
2. Explain why Addy wanted to be taxed as a resident and not under the working
holiday maker tax rates (the amounts are documented in the case law)
3. Explain how the DTA between UK and Australia was applied
4. Explain the process of the cases through the legal system that ultimately ended up
at the High Court
5. As in Cooke and Sherden, when the ATO loses a case, the law changes. In this
case, there has been no change in legislation. If a similar case were present in 2024,
advise on the likely outcome based on the current ATO position.

Use source documents only – legislation, case law and any ATO publication and
guidance in your response. Articles written by journalists, accountants and tax lawyers
MUST NOT be used and referenced in your answer.
You need to answer in your own words and provide your own opinions.
Marks will be allocated for presentation structure and clarity of writing.
State work count at the end of this question.

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Question 2 (worth 7 marks) Word Count of 1,000 will be strictly enforced

Auspler Pty Ltd (“Auspler”) is a family-owned company owned by Ben and Jennifer
that manufactures luggage, primarily environmentally friendly backpacks.

The range is sold through the following channels:
• A flagship retail shop in Melbourne Central;
• Wholesale to other retailer department stores - Myer and David Jones; and
• An online store that ships domestically and internationally

Auspler sources all its raw materials for manufacturing locally in Australia from GST-
registered suppliers.

Auspler operates from a leased warehouse in Tullamarine close to the Melbourne
airport for efficient freight and delivery management.

Auspler provides their staff on-site in Tullamarine with fresh fruits, fruit juice,
kombucha, sparkling water, yoghurt, tea, and coffee in the staff kitchen. All items
are purchased from the local supermarket.
Auspler is “a base rate entity” for Australian tax purposes and is registered for GST.

The following transactions during the 2023/2024 income year:
• Monthly rent of $22,000
• On 1 July 2023, the company took out a $1,000,000 principal and interest
bank loan at an 11% interest rate per annum over 10 years to fund the
purchase of a new machine for the business from Italy. The repayments are
paid monthly in arrears
• In preparation for the new machine, Ben asked his father, Guido, a concreter,
to lay a slab of concrete on 1 November 2023. The concrete cost $11,000
and Guido, charged him $2,200. As Guido was close to retirement and
working part-time, he wasn’t registered or required to be registered for GST.
• The new machine arrived from Italy on 1 December 2023. Auspler needed
to hire a crane for $3,300 to place it in the right position. It then needed to be
wired up by an electrician. Jennifer asked her electrician cousin Rebecca.
Instead of paying her tax invoice of $880, Rebecca agreed she would just
take some backpacks to cover her costs, as she loves giving them to her
family and friends for presents.
Your task:

Advise Auspler of the GST consequences arising from the above transactions. You
may assume any figures shown above are GST inclusive.
References to legislation and case law, are required to support your answer
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Question 3 (worth 8 marks) Word Count of 1,000 will be strictly enforced

Auspler has decided to expand its manufacturing and warehouse capacity. The
business has been very successful, so it is looking to purchase the new facility.

In December 2023, the company purchased a block of land in Greenvale, just on
the other side of Melbourne Airport, for $2 million, with the intention of building an
automated storage and fulfilment warehouse on it.

Before Auspler started construction on the new warehouse, the owners of their
current Tullamarine warehouse wanted to sell. They approached Ben and
Jennifer, and they agreed to purchase it. It was an offer “too good to refuse” as
they had already invested in the new machine on that site!

Given this deal was not planned, Auspler could not fund the purchase. The bank
would not loan them anymore as they already had the debt on the new machine.

So Auspler needed to sell the Greenvale land to buy the Tullamarine warehouse.
They appointed a real estate agent to sell it. The agent charged a fixed fee of
$55,000. The agent advised Auspler that it could make a significant profit from the
sale of the land due to the housing crisis. The agent suggested subdividing the
land and developing it as residential homes. Auspler did not have the time or
money to undertake a huge development, but it did want to maximise its profit on
the sale of the land.
In March 2024, Auspler subdivided the land at a cost of $100,000 and obtained all
the necessary permits for a residential development for $11,000.
To further maximise the profit, they paid an additional $22,000 to the agent for an
extensive marketing campaign.
Auspler sold all the land parcels very quickly for a total of $6 million in May 2024.
Your task:
Advise Auspler on the assessable income consequences arising out of the
above transaction.
References to legislation and case law, are required to support your answer.
END OF ASSIGNMENT