- 8 Marks
AT – July 2023 – L3 – Q1b – International taxation
Calculating the tax payable for a resident company with cross-border income from Ghana and Nigeria.
Question
Libir Ltd is a resident company incorporated in Ghana. Its trading partners have been customers and suppliers from Ghana and also from Nigeria. The company supplies animal feed.
Its operation for 2021 year of assessment is as follows:
Income from Ghana: GH¢10,000,000
Income from Nigeria: ₦1,000,000,000
Additional information:
- Allowable expense granted by the Ghana Revenue Authority is GH¢6,000,000.
- The allowable expense in 1 does not include capital allowance of GH¢1,200,000 which was legitimately claimable by the company.
- The tax paid in Nigeria amounted to ₦40,000,000. The withholding taxes paid in Ghana with evidence of tax credit certificates amounted to GH¢1,000,000.
- The taxpayer has written to the Commissioner-General to relinquish its right under the double taxation arrangement.
- Exchange rate is GH¢1 = ₦60.
Required:
Compute the tax payable.
Find Related Questions by Tags, levels, etc.
- Tags: Allowable expense, Cross-border income, Double Taxation, Tax computation
- Level: Level 3
- Topic: International taxation
- Series: JULY 2023
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