Income Tax Act – Page 2

PT – Nov 2024 – L2 – Q5a – Notification to Commissioner-General for Non-Resident Contracts

Requirements for notifying the Commissioner-General when a resident contracts a non-resident.

Question

For the purpose of withholding tax, the Income Tax Act, 2016 (Act 896) requires a resident person who enters into a contract with a non-resident person which gives rise to income from Ghana to notify the Commissioner-General within thirty (30) days.

Required:

State the items that must be detailed in the notification to the Commissioner-General.

Answer

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Tags: Commissioner-General Notification, Income Tax Act, Non-resident taxation, Tax Compliance, Withholding Tax
Level: Level 2

Topic: Tax Administration
Series: Nov 2024

PT – Nov 2023 – L2 – Q5c – Income Tax Liabilities

Define and distinguish between capital, depreciable, and investment assets under the Income Tax Act.

Question

Section 133 of the Income Tax Act, 2015 (Act 896) provides for the interpretation of capital assets, depreciable assets, and investment assets.

Required:
What are the distinguishing features of capital assets, depreciable assets, and investment assets under the above-mentioned legislation? (5 marks)

Answer

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Tags: Capital Assets, Definitions, Depreciable assets, Income Tax Act, Investment Assets
Level: Level 2

Topic: Corporate Tax Liabilities
Series: NOV 2023

PT – Nov 2023 – L2 – Q5d – Income Tax Liabilities

Explain the tax treatment for the gift of a vehicle received by a business under the Income Tax Act.

Question

Bansey Enterprise received a vehicle from Unilever as the best distributor of Unilever products.

Required:
Explain to the Managing Director of Bansey Enterprise how to treat the gift of the vehicle for tax purposes. (5 marks)

Answer

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Tags: Business Gifts, Business Profits, Corporate Tax, Gift tax, Income Tax Act
Level: Level 2

Topic: Corporate Tax Liabilities
Series: NOV 2023

PT – March 2023 – L2 – Q5d – Taxation of Capital Gains

Explain the transfer of an asset for no consideration under Section 45 of the Income Tax Act, 2015 (Act 896).

Question

Explain the transfer of asset for no consideration under section 45 of the Income Tax Act, 2015 (Act 896).

Answer

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Tags: Capital Gains, Income Tax Act, No Consideration, Taxation, Transfer of Assets
Level: Level 2

Topic: Taxation of Capital Gains
Series: MAR 2023

PT – Dec 2023 – L2 – Q5d – Taxation of Capital Gains

Explanation of the tax treatment for the realization of assets in the event of a merger, amalgamation, or reorganization.

Question

Explain the realization of an asset by way of merger, amalgamation, or reorganization under section 47 of Income Tax Act, 2015 (Act 896). (5 marks)

Answer

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Tags: Amalgamation, Asset Realization, Capital Gains, Income Tax Act, Merger, Reorganization
Level: Level 2

Topic: Taxation of Capital Gains
Series: DEC 2023

PT – Dec 2023 – L2 – Q5c – Taxation of Capital Gains

Calculation of capital gain on the realization of shares and the tax payable.

Question

Yaa Baby acquired shares in Adom Ltd as follows:

Date	Transaction	No. of shares	Share price	Value (GH¢)
01/02/19	Bought 1,000 shares	1,000	2.00	2,000
01/03/19	Bought 1,500 shares	1,500	2.50	3,750
01/06/20	Bought 2,000 shares	2,000	3.00	6,000
01/04/21	Bought 1,750 shares	1,750	4.00	7,000
01/12/21	Received rights issue (1 share for every 10 shares)	625	1.50	937.50
31/12/21	Sold 3,800 shares		6.00	22,800

Required:
Compute the capital gain on the realization and the tax payable. (5 marks)

Answer

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Tags: Capital gains tax, Income Tax Act, Share Sale, Tax computation, Tax law
Level: Level 2

Topic: Taxation of Capital Gains
Series: DEC 2023

PT – Dec 2023 – L2 – Q5b – Withholding Tax Administration

Explanation of the tax credit certificate and its significance in tax administration.

Question

Explain tax credit certificate and its importance in/to tax administration. (5 marks)

Answer

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Tags: Income Tax Act, Tax Administration, Tax Credit Certificate, Tax law, Withholding Tax
Level: Level 2

Topic: Withholding Tax Administration
Series: DEC 2023

PT – Dec 2023 – L2 – Q5a – Withholding Tax Administration

Explanation of the difference between final withholding tax and withholding tax on account with examples.

Question

The provisions of the Income Tax Act, 2015 (Act 896) require a resident person who pays an amount for works or the supply of goods and services to another resident or non-resident person with a source in Ghana to withhold tax from the payment at the rate specified under Paragraph 8 of the First Schedule of the Act and pay same to the Commissioner-General.

Required:
Explain with examples the following:
i) Final withholding tax. (2.5 marks)
ii) Withholding tax on account. (2.5 marks)

Answer

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Tags: Final Tax, Income Tax Act, Tax law, Tax on Account, Withholding Tax
Level: Level 2

Topic: Withholding Tax Administration
Series: DEC 2023

PT – Aug 2022 – L2 – Q4b – Corporate Tax Liabilities

Explain what constitutes domestic and excluded expenditure under the Income Tax Act, 2015 (Act 896)

Question

According to Act 896, the Commissioner-General shall not allow a deduction in respect of domestic expenditure and excluded expenditure incurred by a person.
Required:
Explain what constitutes domestic expenditure and excluded expenditure in line with the provisions in the Income Tax Act, 2015 (Act 896). (10 marks)

Answer

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Tags: Domestic expenditure, Excluded Expenditure, Income Tax Act, Tax deduction
Level: Level 2

Topic: Corporate Tax Liabilities
Series: AUG 2022

PT – Aug 2022 – L2 – Q4a – Corporate Tax Liabilities

Discuss when an expenditure qualifies as a deductible expense under the Income Tax Act.

Question

For an expenditure to be an allowable deduction, there must be a direct connection between the expenditure and the business.
Required:
Discuss this statement in line with the provisions of the Income Tax Act, 2015 (Act 896).

Answer

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Tags: Allowable Deduction, Business Expenses, Income Tax Act, Tax law
Level: Level 2

Topic: Corporate Tax Liabilities
Series: AUG 2022

PT – Mar 2024 – L2 – Q5c – Income Tax Liabilities

Explain the tax treatment of a gift received.

Question

What is the tax treatment of a gift received?

Answer

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Tags: Gift tax, Income Tax, Income Tax Act, Tax Treatment
Level: Level 2

Topic: Income Tax Liabilities
Series: MAR 2024

PT – Mar 2024 – L2 – Q5a – Value-Added Tax (VAT), Customs, and Excise Duties

Explain what is meant by Goods, Works, and Services according to the Income Tax Act.

Question

Persons making payments for the supply of goods, works, and services are required by the provision of the Income Tax Act, 2015 (Act 896) to withhold taxes on the gross amount at various rates and pay the same to the Commissioner-General.

Required:
In reference to the above statement, explain what Goods, Works, and Services are.

Answer

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Tags: Goods, Income Tax Act, Services, VAT, Works
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: MAR 2024

PT – Mar 2024 – L2 – Q4a – Income Tax Liabilities

State the general and residual deduction rules governing the ascertainment of a person’s income from business and investment.

Question

With reference to the Income Tax Act, 2015 (Act 896):

i) State the general and residual deduction rules governing the ascertainment of a person’s income from business and investment. (5 marks)

Answer

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Tags: Allowable expenses, Deduction Rules, Income from Business, Income Tax Act, Investment income
Level: Level 2

Topic: Income Tax Liabilities
Series: MAR 2024

PT – Mar 2024 – L2 – Q3b – Income Tax Liabilities

State the basis periods for a sole proprietorship, company, trust, and partner in a partnership.

Question

State the Basis Periods for the following persons as provided in the Income Tax Act, 2015 (Act 896):

i) A sole proprietorship
ii) A company
iii) A trust
iv) A partner of a partnership

Answer

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Tags: Basis Period, Company, Income Tax Act, Partnership, Sole Proprietorship, Trust
Level: Level 2

Topic: Income Tax Liabilities
Series: MAR 2024

PT – Mar 2024 – L2 – Q3a – Income Tax Liabilities

Distinguish between the Year of Assessment and Basis Period as used in income taxation.

Question

The determination of a person’s tax liability is in relation to the concept of “Year of Assessment” and “Basis Period”.

Required:
In relation to the statement above, distinguish between the concept of Year of Assessment and Basis Period as used in income taxation.

Answer

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Tags: Basis Period, Income Tax Act, Tax computation, Year of Assessment
Level: Level 2

Topic: Income Tax Liabilities
Series: MAR 2024

AT – Nov 2018 – L3 – Q2b – Tax administration in Ghana

Explaining three worthwhile causes and their approval by the Commissioner-General.

Question

The Income Tax Act, 2015 (Act 896), provides under subsection (2) of section 100 a list of worthwhile causes approved by the Government that a person can deduct in the course of doing business.
Required:
Explain THREE (3) worthwhile causes and the basis of approval by the Commissioner-General of GRA? (3 marks)

Answer

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Tags: Charitable contributions, Commissioner-General, Income Tax Act, Tax deductions, Worthwhile causes
Level: Level 3

Topic: Tax administration in Ghana
Series: NOV 2018

AT – Nov 2018 – L3 – Q2a – Tax administration in Ghana

Defining long-term contracts and outlining the tax rules under the Income Tax Act.

Question

a) Long-term contracts span over a long period of time and have tax implications.
Required:
i) What is long-term contract as defined in the Income Tax Act, 2015 (Act 896)? (1 mark)
ii) What are the tax rules on long-term contracts? (2 marks)

Answer

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Tags: Contract Completion, Income Tax Act, Long-Term Contracts, Tax Rules
Level: Level 3

Topic: Tax administration in Ghana
Series: NOV 2018

AT – May 2021 – L3 – Q1b – International Taxation

Evaluate the accuracy of the statement about withholding tax on global payments for goods, works, and services.

Question

At a public symposium, a tax administrator made a statement to the effect that withholding taxes must be exacted from any payment made to persons around the world for goods, works, and services.

Required:
Evaluate the extent to which this statement is true in the light of the tax provisions of the Income Tax Act, 2015 (Act 896) as amended.

Answer

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Tags: Income Tax Act, International tax, Withholding Tax
Level: Level 3

Topic: International taxation
Series: MAY 2021

AT – Aug 2022 – L3 – Q2b – Tax administration in Ghana

Explain unrelieved losses under the Income Tax Act and its implications for Dekey Company.

Question

Dekey Company Ltd was incorporated under the Companies Act, 2019 (Act 992) on 1 January 2021 to prospect for diamonds in the Densu River in the Eastern Region of Ghana.

A review of its Comprehensive Income Statement for the year ended 31 December 2021 showed a loss of GH¢29,304,000 for the 2021 year of assessment.

An extract of the Comprehensive Income Statement is as follows:

Description	GH¢
Income from Operations	864,000
Operational Cost	17,920,000
Administration and General Expenses	11,160,000
Finance Charges	1,088,000
Net Loss	(29,304,000)

The CEO of Dekey Company Ltd remembered a discussion on “Unrelieved Losses” during a training workshop. The CEO has approached you, a final year tax candidate, to explain and advise him on the implications of the loss on future tax liabilities of the company.

Required:
Write a report explaining to the CEO what “Unrelieved Losses” are and the rights available to the company for the loss declared at the end of its first year of operations under the Income Tax Act, 2015 (Act 896).

Answer

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Tags: Income Tax Act, Loss carryforward, Mineral Operations, Unrelieved losses
Level: Level 3

Topic: Tax administration in Ghana
Series: AUG 2022

AT – March 2023 – L3 – Q5b – Tax planning

Discuss the tax-efficient investment opportunities available to Ghanaians in the diaspora under the Income Tax Act, 2016 (Act 896).

Question

Ghana celebrated the “Year of Return with FANFARE” in 2019. The program was said to be a huge success.

The Year of Return Committee has asked you, a tax expert, to give a talk at the Ghana UK Based Achievement (GUBA) program to be held at the Accra International Conference Centre (AICC) on tax benefits for Ghanaians in the diaspora who are interested in doing business in Ghana.

Required:
Discuss the tax-efficient investment opportunities available to Ghanaians in the diaspora under the Income Tax Act, 2016 (Act 896). (10 marks)

Answer

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Tags: Diaspora investments, Income Tax Act, Tax Incentives
Level: Level 3

Topic: Tax planning
Series: MAR 2023

Question Tag: Income Tax Act

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PT – Nov 2024 – L2 – Q5a – Notification to Commissioner-General for Non-Resident Contracts

Requirements for notifying the Commissioner-General when a resident contracts a non-resident.

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PT – Nov 2023 – L2 – Q5c – Income Tax Liabilities

Define and distinguish between capital, depreciable, and investment assets under the Income Tax Act.

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PT – Nov 2023 – L2 – Q5d – Income Tax Liabilities

Explain the tax treatment for the gift of a vehicle received by a business under the Income Tax Act.

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PT – March 2023 – L2 – Q5d – Taxation of Capital Gains

Explain the transfer of an asset for no consideration under Section 45 of the Income Tax Act, 2015 (Act 896).

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PT – Dec 2023 – L2 – Q5d – Taxation of Capital Gains

Explanation of the tax treatment for the realization of assets in the event of a merger, amalgamation, or reorganization.

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PT – Dec 2023 – L2 – Q5c – Taxation of Capital Gains

Calculation of capital gain on the realization of shares and the tax payable.

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PT – Dec 2023 – L2 – Q5b – Withholding Tax Administration

Explanation of the tax credit certificate and its significance in tax administration.

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PT – Dec 2023 – L2 – Q5a – Withholding Tax Administration

Explanation of the difference between final withholding tax and withholding tax on account with examples.

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PT – Aug 2022 – L2 – Q4b – Corporate Tax Liabilities

Explain what constitutes domestic and excluded expenditure under the Income Tax Act, 2015 (Act 896)

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PT – Aug 2022 – L2 – Q4a – Corporate Tax Liabilities

Discuss when an expenditure qualifies as a deductible expense under the Income Tax Act.

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PT – Mar 2024 – L2 – Q5c – Income Tax Liabilities

Explain the tax treatment of a gift received.

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PT – Mar 2024 – L2 – Q5a – Value-Added Tax (VAT), Customs, and Excise Duties

Explain what is meant by Goods, Works, and Services according to the Income Tax Act.

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PT – Mar 2024 – L2 – Q4a – Income Tax Liabilities

State the general and residual deduction rules governing the ascertainment of a person’s income from business and investment.

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PT – Mar 2024 – L2 – Q3b – Income Tax Liabilities

State the basis periods for a sole proprietorship, company, trust, and partner in a partnership.

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PT – Mar 2024 – L2 – Q3a – Income Tax Liabilities

Distinguish between the Year of Assessment and Basis Period as used in income taxation.

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AT – Nov 2018 – L3 – Q2b – Tax administration in Ghana

Explaining three worthwhile causes and their approval by the Commissioner-General.

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AT – Nov 2018 – L3 – Q2a – Tax administration in Ghana

Defining long-term contracts and outlining the tax rules under the Income Tax Act.

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AT – May 2021 – L3 – Q1b – International Taxation

Evaluate the accuracy of the statement about withholding tax on global payments for goods, works, and services.

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AT – Aug 2022 – L3 – Q2b – Tax administration in Ghana

Explain unrelieved losses under the Income Tax Act and its implications for Dekey Company.

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AT – March 2023 – L3 – Q5b – Tax planning

Discuss the tax-efficient investment opportunities available to Ghanaians in the diaspora under the Income Tax Act, 2016 (Act 896).

You're reporting an error for "AT – March 2023 – L3 – Q5b – Tax planning"

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