- 4 Marks
AT – Aug 2022 – L3 – Q1a – International taxation
Tax treatment for a non-resident company using a subsidiary to execute a project.
Question
Jantua Ltd (Jantua) is a company incorporated in the Republic of Israel with subsidiaries across other countries, including Frankaa Company Ltd (Frankaa) in Ghana. All subsidiaries were incorporated in their respective countries by Jantua.
Jantua won a contract with the Ministry of Roads and Highways to construct a road in Ghana. Jantua used its subsidiary, Frankaa, to carry out the project. Jantua billed the Ministry of Roads and Highways for the work done. Likewise, Frankaa billed Jantua for management and technical services on the road project.
Required:
What is the tax treatment of this arrangement?
(4 marks)
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