Assignment

BULAW3731 Income Tax Law & Practice Semester 1, 2020

Purpose
To extend familiarity with locating legal decisions and undertaking research into an aspect of
currently debated taxation law and practice.
It is important for you to have time to think through how to structure and present your
responses, and to review and discuss what the law is in a particular area. Whilst discussion
with others is encouraged, the final piece of work must be your own.

Word Limit
Estimated 2,500 in total. Please be aware that assignments less than the required length will
risk not covering the tasks in Parts A and B adequately.
Note: All Federation University rules relating to referencing, citation and acknowledgement
must be complied with.

Due Date -Week 9

submission through Moodle.
It is recommended that you process your assignment through TURNITIN before
submission.

Required:
Complete the tasks in Part A (worth 70 marks) Part B (worth 30 marks). The Assignment is
worth 30% of your total marks for the course.

Part A (70 marks)

In accordance with the Australian government’s Budget Paper No. 2 Budget Measures 2015-
2016, the Income Tax Rates Amendment (Working Holiday Maker Reform) Act 2017 (the
‘WHMR Act’) was passed. The WHMR Act proposed changes to tax rules for working
holiday makers on 417 and 462 visas (‘backpackers’) as a means of raising revenue. This,
with other proposed legislative amendments concerning working holiday makers, has been
referred to in the media as the ‘Backpacker Tax’.

Choose and read ONE of the following cases.

Clemens and Commissioner of Taxation [2015] AATA 124 (6 March 2015); or
Jaczenko and Commissioner of Taxation [2015] AATA 125 (6 March 2015);or
Koustrup and Commissioner of Taxation [2015] AATA 126 (6 March 2015)

Task
Answer the following questions
1. What issues are being considered in your chosen case, and what decision (conclusion) is
reached? (20 marks)
2. Would the decision in your chosen case support the need for a change to the residency
rules for backpackers in Australia? Give reasons (20 marks)
3. How does the WHMR Act treat income earned by ‘backpackers’ in Australia? (10 marks)
4. Is this different to the way income earned by ‘backpackers’ was treated prior to the
introduction of the WHMR Act? If so, how? (20 marks)

Part B (30 marks)

Consider the judgement delivered on 30 October 2019 by Justice Logan in the Federal Court
of Australia decision Addy v Commissioner of Taxation [2019] FCA 1768.
(Hint: you may either read the decision or read at least one of the several commentaries
available online)

Task
Answer the following questions
1. What are the possible consequences of this decision for ‘backpackers’ who have already
paid tax in accordance with WHMR Act? Give reasons.(20 marks)
2. How has the Australian Tax Office (ATO) responded to the decision in Addy v
Commissioner of Taxation? (10 marks)