DellaBella Pty Ltd is a private company which incorporated in Australia in 2009 under the Corporations Act 2001 in order to operate a Bungee jumping business.

The company has had the following results in the last three years:

Income year Tax result

2015/16 $370 000 loss

2016/17 $500 000 loss

2017/18 $35 000 loss

Della Bella Pty Ltd has prepared the following income statement for 2018/19:

Income
Gross profit from trading	510,000
Fully franked dividends	16,800
Exempt income	11,000
Gross Income		537,800
Expenses
Interest expense	23,000
Wages	58,000
Entertainment expense	12,000
Fines and penalties	3,000
Increase in provision for annual leave	14,700
Depreciation	41,000
PAYG Instalments paid	130,000
Total expenses		281, 700
Net Profit		256, 100

Other information

Note 1 Decline in value for 2017/18 was $38,900.

Note 2 Annual leave paid amounted to $12,000.

Note 3 - The $256, 100 profit does not include any tax losses from previous years.

On the 1 September 2016 65% of the shares with voting, income and capital distribution rights changed ownership. On the 17 June 2017 the company started to operate a Berry Bomb ice cream outlet.

DellaBella Pty Ltd has collected GST of $25 909 and received a yearly subsidy since 2009 from the Government of $20 000. The subsidy is classified as exempt income.

Required

With reference to the relevant legislation and/or case law:

1. Explain the conditions that must be met to establish if a company is a resident of Australia for tax purposes and determine whether the company is a resident of Australia for taxation purposes

2. Calculate DellaBellas taxable income

3. Calculate the tax assessed and the balance of Della Bella 2018/19 tax assessment

4. Discuss how a companys residency status impacts the taxation of a company in Australia. ( Disregard Double Tax Agreements foer the purpose of this question)

Resource starting point only

https://www.ato.gov.au/Business/International-tax-for-business/In-detail/Residency/Residency-requirements-for-companies,-corporate-limited-partnerships-and-trusts/

Appendix 1

Use the following templates to structure your analysis in questions 4, 5, 6 as required

Assessable income

Item	Yes	No	Legislative basis and explanation

Tax deduction

Item	Yes	No	Legislative basis and explanation

Tax calculation assistance

Item	Taxpayer	Taxpayer	Taxpayer
Assessable income
Allowable deductions
Taxable income
Non refundable tax offsets
Medicare Levy
Total Tax and Medicare Levy
PAYG credits
Other credits
Balance of the assessment