Filing a Dispute to Amendment Assessment and Limits

Introducion

This report provides data, statistics, information, and evidence of the culture of taxation, foreign investment, and law practice in Australia, an independent country within the commonwealth of nations with three government, federal, state, and local levels. The report focuses on Mr. Pierre Boulet, a famous French chef, having moved from Paris to Melbourne in Australia in October 2016 to work in one of the renowned dining restaurants. During his stay in Melbourne, Mr. Pierre engaged in some investment decisions involving leasing a unit. Retaining some investments in the local bank back in Paris, purchasing a car, selling an apartment in Paris, and selling a painting and stamps, among others.

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The circumstances generating confusion to the chef are that despite him declaring in his Australian tax returns all the salaries received from the employer, and profits from his Austrian investments, Mr. Pierre was served with a Notice of amended assessment October 5, 2020. The notice included the amounts received in France in his taxable income. As a tax consultant, I will provide Mr. Pierre with advice on highlighted matters in this report.

The Circumstances and Grounds ATO uses to issue Amended Assessment.

Notice of amended in Australia is an itemized account of unpaid tax on the taxable income. Australian Taxation Office (ATO) is a very vigilant body in policing all the taxpayers, both citizens and non- citizens, and is known to issue regular rulings and guidance on the application of taxation regulation (Butler, 2020)

During the 2019/2020 financial year, it is clear Mr. Pierre violated ATO taxation regulations by withholding a 15 percent tax on interest received in France of his Paribas account. For every particular tax period, there is always a single assessment initiated by ATO or the taxpayer, and any changes are found to result in an amendment (Butler, 2020).

In some cases, different rules are applied in relation to an amendment that may relate to the transfer of pricing and capital gains. The taxpayer is always given an opportunity to present their case, before or after the amendment is issued.

Filing a Dispute to Amendment Assessment and Limits

Under the law, the taxpayer has a right to dispute to a notice of the amendment to have them; reviewed. Some of the common causes of the objections are about uncertainty in the interpretation of the law and disagreement with the assessment received (White, 2020). In this particular case, Mr. Pierre did not include interest income received from the bank. He went ahead to receive another payment on the income statement after lodging the tax return. Some of the decisions made upon notice of amendment are subject reviews and problems that result in resolved as quickly as possible (White, 2020).

One of the most important things to pay attention to when filing a dispute to amended assessment is the time limits, which vary from 60 days to four years, and begin from the date when the notice of the amended assessment was issued. For this particular case, Mr. Pierre received a total of 4250 pounds in interest during 2019/2020 and made a profit of 100,000 pounds from the sale of an old apartment in Paris.

The proceeds from both interest and profit for the apartment sale are subject to income assessment; therefore, the ATO commissioner had to amend an assessment for the year of income because Mr. Pierre was a beneficiary of extra income in another country working in Australia (Black, 2020).

The extent of Mr. Pierre’s Liability to Income Tax for Year Ending June 30, 2020

The extent of Mr. Pierre’s liability to income tax depends on several factors considered in the amended assessment notice. According to Mr. Pierre's details, he was in partnership in carrying out business transactions in France for the financial year 2019/2020. It was reasonable to conclude he carried out a scheme of benefit concerning income tax (Black, 2020).

The fact that Mr. Pierre always declared in his Australian tax returns all salaries received from his Australian employer as well as any other profits from his investments in Australia translates to mean ATO accepted his tax returns information at face value. Later on, the go-ahead would make the necessary changes to his income tax assessment after an internal audit review for engaging in business activities outside Australia (Black, 2020).

Mr. Pierre's liability to income tax is also subject to the rules governing the amendment of income tax assessment bearing in mind that a taxpayer is required to pay tax according to ATO regulations. The ATO operates on the principle that whether or not a taxpayer-paid the correct amount of income tax, eventually, their tax affairs will be reconciled by the end of the financial year (Black, 2020).

The ATO income tax regulations are designed to promote a sense of certainty at the end of the financial year, and amendments usually increase taxpayer liability whenever incorrect assessments are discovered. According to the current amendment rules, there is a standard period for the ATO office to increase or reduce a taxpayer's liability (Jacobson, 2020).

Income Tax Remittance in Australia While on Cruise to Europe during 2020/2021 Financial Year

Mr. Pierre’s plans to go on a cruise to Europe in early November 2020 are subject to income tax review by ATO since he will not be back in Australia till the end of April 2021. In Australia, an individual has taxed on their income during the year that an individual receives it. Therefore if Mr. Pierre pays the outstanding tax in mid-may, 2021, the ATO will tax him differently because he will be residing in a foreign country (Cartoon, 2020).

In this case, Mr. Pierre is eligible for foreign resident concessions. However, his income tax will be derived from his earnings overseas and reduced by an offset for the foreign tax remittance. In Australia, Mr. Pierre is considered a temporal resident and liable to ATO income tax remittance on worldwide incomes, investments, or other individual gains (Cartoon, 2020). In this particular case, employment income for his services as a chef may be subjected to tax exemption through an operation usually referred to as the Double Taxation Agreement (DTA) (Walpole, 2020).

Summary

This report provides documentation of taxation consultation advice on matters raised by Mr. Pierre Boulet, a famous French chef, having moved from Paris to Melbourne in Australia in October 2016 to work in one of the renowned dining restaurants. The matters raised by Mr. Pierre are related to the circumstances and grounds ATO uses to issue a notice of amended assessment and decide whether to file a dispute on the amended assessment and its limitation. Others include the extent of taxpayer liability and income tax remittance decisions while on a trip to Europe. The report's basis identifies that the taxation regime in Australia begins on July 1 and ends on June 30 of the next year.

References

Black, C., 2020. The Future of Work: The Gig Economy and Pressures on the Tax System. Canadian Tax Journal/Revue fiscale Canadienne, 68(1), 69-97.

Butler, D., 2020. What ATO publications can be relied on?. Taxation in Australia, 55(3), 141.

Cartoon, S. 2020. Employee share schemes and corporate transactions. Tax Specialist, 23(3), 118.

Crawford, L. B., 2020. The Rule of Law in the Age of Statutes. Federal Law Review, 48(2), 159-185.

Jacobson, R., 2020. Tax reform: With 2020 vision. Taxation in Australia, 55(2), 79.

Walpole, M., 2020. Ethical Standards for Tax Advisers. In Ethics and Taxation (pp. 233-247). Springer, Singapore.

White, J., 2020. THE Australian BHP Billiton case on dual structures is a warning for others. International Tax Review.