Input VAT – NBC Institute

TAX – Nov 2016 – L2 – Q7 – Value Added Tax (VAT)

Discuss the VAT position of Trevor Optimal Nigeria Limited and recommend actions to address Input VAT buildup.

Question

Trevor Optimal Nigeria Limited has been operating in the oil and gas sector in Nigeria since January 1, 2005. The company is engaged in the importation and sale of oil tools. With the introduction of the Reverse Charge Mechanism in Nigeria, the company has accumulated Input VAT since 2008, which, as of December 31, 2015, stood at N6,000,000. This Input VAT resulted from the importation of oil tools that the company sells to oil companies.

The company’s Output VAT is withheld by its customers at source and remitted to the Federal Inland Revenue Service (FIRS). This practice has left the company with a significant buildup of Input VAT without any Output VAT to offset it.

The Chief Executive Officer has expressed concern over this buildup of Input VAT and has invited you for a meeting to discuss the issue. The CEO reasoned that as long as the company continues in its line of business, the Input VAT will continue to grow and has requested you to advise the company.

Required:
a. Provide brief information for the Chief Executive Officer on why the company is in the current position. (5 Marks)
b. Advise the Chief Executive Officer on the best action to follow in accordance with the law. (5 Marks)
c. State the steps required by FIRS to grant a tax refund to a taxpayer. (5 Marks)

Answer

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Tags: Input VAT, Output VAT, Reverse Charge Mechanism, Tax advice, Tax Refund
Level: Level 2

Topic: Tax Administration and Enforcement, Value-Added Tax (VAT)
Series: NOV 2016

TAX – Nov 2016 – L2 – Q5b – Value Added Tax (VAT)

Compute the total VAT payable to the Federal Inland Revenue Service (FIRS) for a series of transactions involving a textile company, wholesaler, and retailer.

Question

Olamide Limited is a textile company based in Abuja. The company sold its vatable products to a wholesaler, Qudus Enterprises, for N1,800,000. The wholesaler in turn sold the products to a retailer, Mr. Lekan, for N2,500,000, who finally sold to consumers for N5,000,000. Assume there was no closing inventory at each stage of the transactions.

Required:
Compute the total VAT payable to the Federal Inland Revenue Service.

Answer

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Tags: Input VAT, Output VAT, Tax computation, VAT
Level: Level 2

Topic: Value-Added Tax (VAT)
Series: NOV 2016

PT – Nov 2019 – L2 – Q2b – Value-Added Tax (VAT)

Calculates withholding VAT, output VAT, and VAT payable by Akorfa Vinyo for equipment hire services.

Question

b) Akorfa Vinyo, an equipment hiring company, raises an invoice in the sum of GH¢500,000.00 in respect of hiring of equipment services to a withholding VAT agent (Sir James Enterprise). This supply excludes Value Added Tax (VAT of 12.5%), National Health Insurance Levy (NHIL of 2.5%), and Ghana Education Trust Fund Levy (GETFL of 2.5%).

Assume that this is the only supply of value-added activity done by Akorfa Vinyo in the period and payments are made in the same period.

Required:
i) Calculate the proportion of VAT that should be withheld by the agent in respect of payment of the invoice (the withholding VAT rate is 7%). (3 marks)
ii) Calculate the output VAT to be shown on the face of Akorfa’s monthly VAT Return. (3 marks)
iii) Calculate the VAT payable by Akorfa, if the total input VAT incurred for the period is GH¢25,000. (3 marks)
iv) Show the payment details by the Withholding Agent for the supply. (3 marks)

Answer

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Tags: Input VAT, Output VAT, Tax deduction, VAT, Withholding VAT
Level: Level 2

Topic: Value-Added Tax (VAT)
Series: NOV 2019

PT – March 2023 – L2 – Q2c – Value-Added Tax (VAT), Customs, and Excise Duties

Advise on deductibility rules of input VAT incurred before registration.

Question

Atakora Manufacturing Ltd is a company at Winneba that manufactures roofing sheets. The company has recently registered for VAT and is not sure about the treatment of its input VAT paid prior to VAT registration. The company has sought your guidance on how to treat input taxes paid prior to registration.

Required:

Advise the company on the deductibility rules of input VAT incurred by a company prior to VAT registration.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Input VAT, Tax law, VAT Deductibility, VAT Registration
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: MAR 2023

PT – Aug 2022 – L2 – Q2a – Value-Added Tax (VAT), Customs, and Excise Duties

Advise Ekumfi Fruit Processing on the conditions required for a VAT refund under the Value Added Tax Act, 2013.

Question

You are a student of taxation at Ebeyeyie Tax Education Institute. You have been contacted for tax advice by Ekumfi Fruit Processing Ghana Ltd. The company produces various kinds of fruit juices for both local and foreign markets. The Finance Director recently learned that the company can apply for VAT refund from the Ghana Revenue Authority (GRA) and has approached you for advice.
Required:
Advise the company on SIX (6) conditions that must be satisfied before the GRA may refund the excess VAT Input Tax to the company under the Value Added Tax Act, 2013 (Act 870), as amended. (9 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: GRA, Input VAT, Tax Administration, Tax Refund Conditions, VAT Refund
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: AUG 2022

TAX – Nov 2016 – L2 – Q7 – Value Added Tax (VAT)

Discuss the VAT position of Trevor Optimal Nigeria Limited and recommend actions to address Input VAT buildup.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Input VAT, Output VAT, Reverse Charge Mechanism, Tax advice, Tax Refund
Level: Level 2

Topic: Tax Administration and Enforcement, Value-Added Tax (VAT)
Series: NOV 2016

TAX – Nov 2016 – L2 – Q5b – Value Added Tax (VAT)

Compute the total VAT payable to the Federal Inland Revenue Service (FIRS) for a series of transactions involving a textile company, wholesaler, and retailer.

Question

Required:
Compute the total VAT payable to the Federal Inland Revenue Service.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Input VAT, Output VAT, Tax computation, VAT
Level: Level 2

Topic: Value-Added Tax (VAT)
Series: NOV 2016

PT – Nov 2019 – L2 – Q2b – Value-Added Tax (VAT)

Calculates withholding VAT, output VAT, and VAT payable by Akorfa Vinyo for equipment hire services.

Question

Assume that this is the only supply of value-added activity done by Akorfa Vinyo in the period and payments are made in the same period.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Input VAT, Output VAT, Tax deduction, VAT, Withholding VAT
Level: Level 2

Topic: Value-Added Tax (VAT)
Series: NOV 2019

PT – March 2023 – L2 – Q2c – Value-Added Tax (VAT), Customs, and Excise Duties

Advise on deductibility rules of input VAT incurred before registration.

Question

Required:

Advise the company on the deductibility rules of input VAT incurred by a company prior to VAT registration.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Input VAT, Tax law, VAT Deductibility, VAT Registration
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: MAR 2023

PT – Aug 2022 – L2 – Q2a – Value-Added Tax (VAT), Customs, and Excise Duties

Advise Ekumfi Fruit Processing on the conditions required for a VAT refund under the Value Added Tax Act, 2013.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: GRA, Input VAT, Tax Administration, Tax Refund Conditions, VAT Refund
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: AUG 2022

Question Tag: Input VAT

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TAX – Nov 2016 – L2 – Q7 – Value Added Tax (VAT)

Discuss the VAT position of Trevor Optimal Nigeria Limited and recommend actions to address Input VAT buildup.

TAX – Nov 2016 – L2 – Q5b – Value Added Tax (VAT)

Compute the total VAT payable to the Federal Inland Revenue Service (FIRS) for a series of transactions involving a textile company, wholesaler, and retailer.

PT – Nov 2019 – L2 – Q2b – Value-Added Tax (VAT)

Calculates withholding VAT, output VAT, and VAT payable by Akorfa Vinyo for equipment hire services.

PT – March 2023 – L2 – Q2c – Value-Added Tax (VAT), Customs, and Excise Duties

Advise on deductibility rules of input VAT incurred before registration.

PT – Aug 2022 – L2 – Q2a – Value-Added Tax (VAT), Customs, and Excise Duties

Advise Ekumfi Fruit Processing on the conditions required for a VAT refund under the Value Added Tax Act, 2013.

TAX – Nov 2016 – L2 – Q7 – Value Added Tax (VAT)

Discuss the VAT position of Trevor Optimal Nigeria Limited and recommend actions to address Input VAT buildup.

TAX – Nov 2016 – L2 – Q5b – Value Added Tax (VAT)

Compute the total VAT payable to the Federal Inland Revenue Service (FIRS) for a series of transactions involving a textile company, wholesaler, and retailer.

PT – Nov 2019 – L2 – Q2b – Value-Added Tax (VAT)

Calculates withholding VAT, output VAT, and VAT payable by Akorfa Vinyo for equipment hire services.

PT – March 2023 – L2 – Q2c – Value-Added Tax (VAT), Customs, and Excise Duties

Advise on deductibility rules of input VAT incurred before registration.

PT – Aug 2022 – L2 – Q2a – Value-Added Tax (VAT), Customs, and Excise Duties

Advise Ekumfi Fruit Processing on the conditions required for a VAT refund under the Value Added Tax Act, 2013.

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TAX – Nov 2016 – L2 – Q7 – Value Added Tax (VAT)

Discuss the VAT position of Trevor Optimal Nigeria Limited and recommend actions to address Input VAT buildup.

You're reporting an error for "TAX – Nov 2016 – L2 – Q7 – Value Added Tax (VAT)"

TAX – Nov 2016 – L2 – Q5b – Value Added Tax (VAT)

Compute the total VAT payable to the Federal Inland Revenue Service (FIRS) for a series of transactions involving a textile company, wholesaler, and retailer.

You're reporting an error for "TAX – Nov 2016 – L2 – Q5b – Value Added Tax (VAT)"

PT – Nov 2019 – L2 – Q2b – Value-Added Tax (VAT)

Calculates withholding VAT, output VAT, and VAT payable by Akorfa Vinyo for equipment hire services.

You're reporting an error for "PT – Nov 2019 – L2 – Q2b – Value-Added Tax (VAT)"

PT – March 2023 – L2 – Q2c – Value-Added Tax (VAT), Customs, and Excise Duties

Advise on deductibility rules of input VAT incurred before registration.

You're reporting an error for "PT – March 2023 – L2 – Q2c – Value-Added Tax (VAT), Customs, and Excise Duties"

PT – Aug 2022 – L2 – Q2a – Value-Added Tax (VAT), Customs, and Excise Duties

Advise Ekumfi Fruit Processing on the conditions required for a VAT refund under the Value Added Tax Act, 2013.

You're reporting an error for "PT – Aug 2022 – L2 – Q2a – Value-Added Tax (VAT), Customs, and Excise Duties"

TAX – Nov 2016 – L2 – Q7 – Value Added Tax (VAT)

Discuss the VAT position of Trevor Optimal Nigeria Limited and recommend actions to address Input VAT buildup.

You're reporting an error for "TAX – Nov 2016 – L2 – Q7 – Value Added Tax (VAT)"

TAX – Nov 2016 – L2 – Q5b – Value Added Tax (VAT)

Compute the total VAT payable to the Federal Inland Revenue Service (FIRS) for a series of transactions involving a textile company, wholesaler, and retailer.

You're reporting an error for "TAX – Nov 2016 – L2 – Q5b – Value Added Tax (VAT)"

PT – Nov 2019 – L2 – Q2b – Value-Added Tax (VAT)

Calculates withholding VAT, output VAT, and VAT payable by Akorfa Vinyo for equipment hire services.

You're reporting an error for "PT – Nov 2019 – L2 – Q2b – Value-Added Tax (VAT)"

PT – March 2023 – L2 – Q2c – Value-Added Tax (VAT), Customs, and Excise Duties

Advise on deductibility rules of input VAT incurred before registration.

You're reporting an error for "PT – March 2023 – L2 – Q2c – Value-Added Tax (VAT), Customs, and Excise Duties"

PT – Aug 2022 – L2 – Q2a – Value-Added Tax (VAT), Customs, and Excise Duties

Advise Ekumfi Fruit Processing on the conditions required for a VAT refund under the Value Added Tax Act, 2013.

You're reporting an error for "PT – Aug 2022 – L2 – Q2a – Value-Added Tax (VAT), Customs, and Excise Duties"

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