Assignment task: Eric and Oliver are equal partners in Pinnacle Development. However, according to the partnership agreement, Eric is to receive a predetermined 'salary' of $30,000 per annum for managing the business. Oliver is not entitled to any partner's salary. Eric has provided you with a summary of the profit and loss statement for the partnership for the year ended 2022.
Revenue: $120,000
Less: Expenses (all tax deductible) ($40,000)
Less: Partners salary - Eric ($30,000)
Accounting profit of the p'ship $50,000
Additional information:
Eric is single and has private hospital cover and has claimed the private health insurance rebate through his private health insurance provider.
Required:
(a) Calculate Eric's net tax payable for the 2021/22 income tax year
(b) Advise Eric whether Pinnacle Development is required to register for GST.