Local sales – NBC Institute

TX – May 2019 – L3 – Q5c – Business Income – Corporate Income Tax

Evaluate the statement regarding offsetting losses from export of non-traditional products against profits from local sales.

Question

A company engages in exports of non-traditional products and makes local sales of its products. It has as recently, as of 2018, recorded huge losses on the exports but makes gains on the local sales and intends to offset the loss against the profit from the local sales as both represent its business activities.

Required: Evaluate the above statement critically in light of the tax provisions and its effect, if any, on revenue.
(4 marks)

Answer

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Tags: Business income, Export, Local sales, Losses, Non-Traditional Products, Revenue
Level: Level 3

Topic: Business income - Corporate income tax
Series: MAY 2019

AT – NOV 2021 – L3 – Q1a – Business income – Corporate income tax | International taxation

Compute tax payable for a Free Zone Enterprise based on income from local and export sales and determine the treatment of certain adjustments.

Question

Orga Ltd has the following information relating to its operation as a Free Zone Enterprise for the 2020 year of assessment with a basis period from January to December each year:

Description	Amount (GH¢)
Revenue	35,000,000
Cost	(21,000,000)
Profit	14,000,000

Additional information:

Depreciation of GH¢200,000 has been added to the cost above.
Revenue: Local sales GH¢25,000,000; Exports GH¢10,000,000.
The Managing Director was provided with a mini bar and a swimming pool as part of his employment package costing GH¢1,200,000 in his private residence. The employer added only GH¢200,000 as part of the employment income for tax purposes. The total cost has been adjusted to the cost above.
The dividend received from the United States of America net of taxes of 10% was GH¢22,500. This income has not yet been recorded, although it has been credited in the bank statement.
The excess proceeds from the sale of a depreciable asset over the written down value amount to GH¢300,000. This has not yet been recorded in the company’s accounts.

Required:
i) Compute the tax payable. (6 marks)
ii) Explain the tax treatment of the cost of the swimming pool and mini bar. (2 marks)

Answer

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Tags: Depreciation, Dividend income, Excess Proceeds, Export Sales, Free Zone Enterprise, Local sales, Tax computation, Tax Treatment
Level: Level 3

Topic: Business income - Corporate income tax, International taxation
Series: NOV 2021

AT – Nov 2020 – L3 – Q1 – Tax administration in Ghana | Business Income – Corporate Income Tax

A report on tax incentives for Free Zone Enterprises, tax implications for local sales, and requirements for foreign investors to start trading in Ghana.

Question

Esther Naah, a Ghanaian by birth, has spent most of her life in the United Kingdom. She has made a lot of savings and would want to invest in Ghana. She has heard of the Ghana Free Zone Authority and been told that the rationale behind the free trade zone is the development of disadvantaged regions. You work in a Tax Consulting firm and your Managing Partner has called on you to brief Esther, on the following issues during her next appointment to the Tax Consulting firm.

Required: Draft a report that will incorporate the following:

a) Tax incentives and benefits for Free Zone Enterprises.
(10 marks)

b) What will be the tax implication if the Free Zone Enterprise sells into the local markets?
(4 marks)

c) What are the requirements a foreigner should meet in order to start a trade in Ghana?
(6 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capital requirement, Corporate Income Tax, Foreign investors, Free Zone Enterprises, Ghana Investment Promotion Center (GIPC), Local sales, Tax Incentives
Level: Level 3

Topic: Business income - Corporate income tax, Tax administration in Ghana
Series: NOV 2020

AT – March 2023 – L3 – Q2d – Tax administration in Ghana

Discuss the tax implications of a free zone entity exceeding its approved local sales quota.

Question

Koliko Ltd established a free zone entity in Ghana and got approval to sell 20% locally and export the rest from the Minister of Trade. Contrary to the approval, Koliko Ltd decided to export 60% and sell 40% of its produce into the local market.

According to the Board Chairman of the company, this was wrong and that the Ghana Revenue Authority would consider the whole arrangement as artificial since the company departed from the approval by the Ministry of Trade.

Required:
What is the tax implication of the above arrangement?

Answer

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Tags: Anti-Avoidance, Corporate Tax, Free zones, Local sales
Level: Level 3

Series: MAR 2023

TX – May 2019 – L3 – Q5c – Business Income – Corporate Income Tax

Evaluate the statement regarding offsetting losses from export of non-traditional products against profits from local sales.

Question

Required: Evaluate the above statement critically in light of the tax provisions and its effect, if any, on revenue.
(4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business income, Export, Local sales, Losses, Non-Traditional Products, Revenue
Level: Level 3

Topic: Business income - Corporate income tax
Series: MAY 2019

AT – NOV 2021 – L3 – Q1a – Business income – Corporate income tax | International taxation

Compute tax payable for a Free Zone Enterprise based on income from local and export sales and determine the treatment of certain adjustments.

Question

Orga Ltd has the following information relating to its operation as a Free Zone Enterprise for the 2020 year of assessment with a basis period from January to December each year:

Description	Amount (GH¢)
Revenue	35,000,000
Cost	(21,000,000)
Profit	14,000,000

Additional information:

Depreciation of GH¢200,000 has been added to the cost above.
Revenue: Local sales GH¢25,000,000; Exports GH¢10,000,000.
The Managing Director was provided with a mini bar and a swimming pool as part of his employment package costing GH¢1,200,000 in his private residence. The employer added only GH¢200,000 as part of the employment income for tax purposes. The total cost has been adjusted to the cost above.
The dividend received from the United States of America net of taxes of 10% was GH¢22,500. This income has not yet been recorded, although it has been credited in the bank statement.
The excess proceeds from the sale of a depreciable asset over the written down value amount to GH¢300,000. This has not yet been recorded in the company’s accounts.

Required:
i) Compute the tax payable. (6 marks)
ii) Explain the tax treatment of the cost of the swimming pool and mini bar. (2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Depreciation, Dividend income, Excess Proceeds, Export Sales, Free Zone Enterprise, Local sales, Tax computation, Tax Treatment
Level: Level 3

Topic: Business income - Corporate income tax, International taxation
Series: NOV 2021

AT – Nov 2020 – L3 – Q1 – Tax administration in Ghana | Business Income – Corporate Income Tax

A report on tax incentives for Free Zone Enterprises, tax implications for local sales, and requirements for foreign investors to start trading in Ghana.

Question

Required: Draft a report that will incorporate the following:

a) Tax incentives and benefits for Free Zone Enterprises.
(10 marks)

b) What will be the tax implication if the Free Zone Enterprise sells into the local markets?
(4 marks)

c) What are the requirements a foreigner should meet in order to start a trade in Ghana?
(6 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capital requirement, Corporate Income Tax, Foreign investors, Free Zone Enterprises, Ghana Investment Promotion Center (GIPC), Local sales, Tax Incentives
Level: Level 3

Topic: Business income - Corporate income tax, Tax administration in Ghana
Series: NOV 2020

AT – March 2023 – L3 – Q2d – Tax administration in Ghana

Discuss the tax implications of a free zone entity exceeding its approved local sales quota.

Question

Required:
What is the tax implication of the above arrangement?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Anti-Avoidance, Corporate Tax, Free zones, Local sales
Level: Level 3

Series: MAR 2023

Question Tag: Local sales

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TX – May 2019 – L3 – Q5c – Business Income – Corporate Income Tax

Evaluate the statement regarding offsetting losses from export of non-traditional products against profits from local sales.

AT – NOV 2021 – L3 – Q1a – Business income – Corporate income tax | International taxation

Compute tax payable for a Free Zone Enterprise based on income from local and export sales and determine the treatment of certain adjustments.

AT – Nov 2020 – L3 – Q1 – Tax administration in Ghana | Business Income – Corporate Income Tax

A report on tax incentives for Free Zone Enterprises, tax implications for local sales, and requirements for foreign investors to start trading in Ghana.

AT – March 2023 – L3 – Q2d – Tax administration in Ghana

Discuss the tax implications of a free zone entity exceeding its approved local sales quota.

TX – May 2019 – L3 – Q5c – Business Income – Corporate Income Tax

Evaluate the statement regarding offsetting losses from export of non-traditional products against profits from local sales.

AT – NOV 2021 – L3 – Q1a – Business income – Corporate income tax | International taxation

Compute tax payable for a Free Zone Enterprise based on income from local and export sales and determine the treatment of certain adjustments.

AT – Nov 2020 – L3 – Q1 – Tax administration in Ghana | Business Income – Corporate Income Tax

A report on tax incentives for Free Zone Enterprises, tax implications for local sales, and requirements for foreign investors to start trading in Ghana.

AT – March 2023 – L3 – Q2d – Tax administration in Ghana

Discuss the tax implications of a free zone entity exceeding its approved local sales quota.

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TX – May 2019 – L3 – Q5c – Business Income – Corporate Income Tax

Evaluate the statement regarding offsetting losses from export of non-traditional products against profits from local sales.

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AT – NOV 2021 – L3 – Q1a – Business income – Corporate income tax | International taxation

Compute tax payable for a Free Zone Enterprise based on income from local and export sales and determine the treatment of certain adjustments.

You're reporting an error for "AT – NOV 2021 – L3 – Q1a – Business income – Corporate income tax | International taxation"

AT – Nov 2020 – L3 – Q1 – Tax administration in Ghana | Business Income – Corporate Income Tax

A report on tax incentives for Free Zone Enterprises, tax implications for local sales, and requirements for foreign investors to start trading in Ghana.

You're reporting an error for "AT – Nov 2020 – L3 – Q1 – Tax administration in Ghana | Business Income – Corporate Income Tax"

AT – March 2023 – L3 – Q2d – Tax administration in Ghana

Discuss the tax implications of a free zone entity exceeding its approved local sales quota.

You're reporting an error for "AT – March 2023 – L3 – Q2d – Tax administration in Ghana"

TX – May 2019 – L3 – Q5c – Business Income – Corporate Income Tax

Evaluate the statement regarding offsetting losses from export of non-traditional products against profits from local sales.

You're reporting an error for "TX – May 2019 – L3 – Q5c – Business Income – Corporate Income Tax"

AT – NOV 2021 – L3 – Q1a – Business income – Corporate income tax | International taxation

Compute tax payable for a Free Zone Enterprise based on income from local and export sales and determine the treatment of certain adjustments.

You're reporting an error for "AT – NOV 2021 – L3 – Q1a – Business income – Corporate income tax | International taxation"

AT – Nov 2020 – L3 – Q1 – Tax administration in Ghana | Business Income – Corporate Income Tax

A report on tax incentives for Free Zone Enterprises, tax implications for local sales, and requirements for foreign investors to start trading in Ghana.

You're reporting an error for "AT – Nov 2020 – L3 – Q1 – Tax administration in Ghana | Business Income – Corporate Income Tax"

AT – March 2023 – L3 – Q2d – Tax administration in Ghana

Discuss the tax implications of a free zone entity exceeding its approved local sales quota.

You're reporting an error for "AT – March 2023 – L3 – Q2d – Tax administration in Ghana"

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