Branch profit tax – NBC Institute

PT – Aug 2022 – L2 – Q5a – Corporate Tax Liabilities

Compute the branch profit tax for Chahuncha Ghana Branch for the year of assessment 2020.

Question

Chahuncha Ghana Branch declares a profit before tax of GH¢6,000,000 in 2020 year of assessment after charging depreciation of GH¢680,000 and a loss of GH¢1,500,000 which was incurred in 2012. The capital allowance for the year amounted to GH¢750,000, yet to be adjusted. The corporate tax rate is 25%.
Required:
Compute the Branch Profit Tax for the 2020 year of assessment.

Answer

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Tags: Branch profit tax, Corporate Tax, Depreciation, Loss carry forward
Level: Level 2

Topic: Corporate Tax Liabilities
Series: AUG 2022

AT – March 2023 – L3 – Q1a – International taxation

Explain the benefits of converting an external company into a limited liability company, compute tax payable, and discuss tax implications of conversion.

Question

Thunder Ltd resident in the USA has established an external company in Ghana as Thunder Ghana Ltd (Branch).

The following relates to the activities of Thunder Ghana Ltd (Branch) for 2021 year of assessment.

Description	GH¢
Sales	1,200,000,000
Cost of sales	(700,000,000)
Gross Profit	500,000,000
Add: Rental Income of Commercial Property (gross)	100,000,000
Add: Interest on Treasury bills (gross)	50,000,000
	650,000,000
Less operating expenses:
Depreciation	1,200,000
Penalty	600,000
Sponsorship to shareholders’ children’s education	100,000
Interest on loan on capital project	50,000
Penalty imposed by Regulatory Authority	290,000
	647,760,000

Capital allowance agreed with the Ghana Revenue Authority amounted to GH¢1,700,700.

The management of Thunder Ltd has indicated its willingness to convert the company as an external company into a limited liability company.

Required:
i) Explain THREE (3) reasons why it is better to convert the branch into a limited liability company rather than operate as an external company. (3 marks)
ii) Compute the tax payable and branch profit tax. (7 marks)
iii) What is the tax implication if an external company converts into a limited liability company? (2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Branch conversion, Branch profit tax, Corporate Tax, External company
Level: Level 3

Topic: International taxation
Series: MAR 2023

PT – Aug 2022 – L2 – Q5a – Corporate Tax Liabilities

Compute the branch profit tax for Chahuncha Ghana Branch for the year of assessment 2020.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Branch profit tax, Corporate Tax, Depreciation, Loss carry forward
Level: Level 2

Topic: Corporate Tax Liabilities
Series: AUG 2022

AT – March 2023 – L3 – Q1a – International taxation

Explain the benefits of converting an external company into a limited liability company, compute tax payable, and discuss tax implications of conversion.

Question

Thunder Ltd resident in the USA has established an external company in Ghana as Thunder Ghana Ltd (Branch).

The following relates to the activities of Thunder Ghana Ltd (Branch) for 2021 year of assessment.

Description	GH¢
Sales	1,200,000,000
Cost of sales	(700,000,000)
Gross Profit	500,000,000
Add: Rental Income of Commercial Property (gross)	100,000,000
Add: Interest on Treasury bills (gross)	50,000,000
	650,000,000
Less operating expenses:
Depreciation	1,200,000
Penalty	600,000
Sponsorship to shareholders’ children’s education	100,000
Interest on loan on capital project	50,000
Penalty imposed by Regulatory Authority	290,000
	647,760,000

Capital allowance agreed with the Ghana Revenue Authority amounted to GH¢1,700,700.

The management of Thunder Ltd has indicated its willingness to convert the company as an external company into a limited liability company.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Branch conversion, Branch profit tax, Corporate Tax, External company
Level: Level 3

Topic: International taxation
Series: MAR 2023

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PT – Aug 2022 – L2 – Q5a – Corporate Tax Liabilities

Compute the branch profit tax for Chahuncha Ghana Branch for the year of assessment 2020.

AT – March 2023 – L3 – Q1a – International taxation

Explain the benefits of converting an external company into a limited liability company, compute tax payable, and discuss tax implications of conversion.

PT – Aug 2022 – L2 – Q5a – Corporate Tax Liabilities

Compute the branch profit tax for Chahuncha Ghana Branch for the year of assessment 2020.

AT – March 2023 – L3 – Q1a – International taxation

Explain the benefits of converting an external company into a limited liability company, compute tax payable, and discuss tax implications of conversion.

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PT – Aug 2022 – L2 – Q5a – Corporate Tax Liabilities

Compute the branch profit tax for Chahuncha Ghana Branch for the year of assessment 2020.

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AT – March 2023 – L3 – Q1a – International taxation

Explain the benefits of converting an external company into a limited liability company, compute tax payable, and discuss tax implications of conversion.

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PT – Aug 2022 – L2 – Q5a – Corporate Tax Liabilities

Compute the branch profit tax for Chahuncha Ghana Branch for the year of assessment 2020.

You're reporting an error for "PT – Aug 2022 – L2 – Q5a – Corporate Tax Liabilities"

AT – March 2023 – L3 – Q1a – International taxation

Explain the benefits of converting an external company into a limited liability company, compute tax payable, and discuss tax implications of conversion.

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