Sample Essay on:
Private Company Payments, Loans (Amalgamated Loans) and Debt Forgiveness as Dividends Under The Australian Income Tax Assessment Act 1936

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Essay / Research Paper Abstract

This 16 page paper looks at the way that payments by private companies are treated under The Australian Income Tax Assessment Act 1936 Division 7A(Section 109B-109ZE). This paper looks at deemed dividends, amalgamated loans and loan forgiveness. The bibliography cites 7 sources.

Page Count:

16 pages (~225 words per page)

File: TS14_TEaustln.rtf

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Unformatted sample text from the term paper:

necessity has many complexities. The tax rules and regulation will be complex and often require clarification. Looking gat Australian tax law and the way in which payments made by private companies are regulated this is no exception. The payment of private company payments, loans (amalgamated loans) and debt forgiveness as dividends (deemed dividends) is legislated for under the Australian Income Tax Assessment Act 1936, Part 3, Division 7A.(Section 109B-109ZE), which has also been amended. In this paper we will look at these regulations. Amalgamated Loans Looking first at amalgamated loans the first step is to define what is meant by an amalgamated loan. The definition is given under subsection 109E(3), and states that this may be seen where there is one or more loans tat have been granted to the same shareholder or one of their associates in the same financial year (Australian Taxation Office, 2003). There is also the need for the loan to meet the requirements which are outlined in subsection 109N(1) which have minim interest level and term standards, and also has the same maximum term as set out in subsection 109N(3). In addition there is also the requirement that the loan has not been repaid in full at the end of the relevant financial year (Australian Taxation Office, 2003). If all of these criteria is made then a private company can be deemed to have made an amalgamated loan (Australian Taxation Office, 2003). Determining the amount of the loan for that year is simple, according to subsection 109E(3) it is the amount that has not been repaid at the end of the financial when the loan was made (Australian Taxation Office, 2003). Where there are different loans that have been made in different years these cannot be amalgamated and as such there will be ...

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