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The AAT has held that the Commissioner correctly assessed the taxpayer to the Medicare Levy and the Medicare Levy Surcharge in respect of the untaxed element of an eligible termination payment (ETP), the amount being included in taxable income for this purpose. The AAT also rejected an argument by the taxpayer that the amount of the tax free threshold ($6,000) was excluded from taxable income for the purposes of calculating Medicare Levy: Kowalski and FCT [2006] AATA 669 (AAT, Hughes M, 31 July 2006).

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