- 10 Marks
TAX – May 2019 – L2 – Q1b – Companies Income Tax (CIT)
Calculate profit sharing for the partners of Obi Consults.
Question
ABCEE Limited has been in the business of clearing and forwarding in Nigeria since 2007. The company has a standing policy of declaring dividends to the shareholders and has continued to do so despite the dwindling business activities in recent years. The following information was extracted from the ABCEE Limited’s income tax returns submitted to the Federal Inland Revenue Service for the 2016 year of assessment:
| Description | Amount (N) |
|---|---|
| Total profit per 2016 tax computation | 10,899,000 |
| Tax assessed based on total profit @ 30% | 3,269,700 |
| Dividend declared | 14,000,000 |
Required:
As the desk officer in charge of ABCEE Limited, compute the revised tax liability of the company in line with Section 19 of the Companies Income Tax Act Cap C21 LFN 2004 (as amended).
Find Related Questions by Tags, levels, etc.
- Tags: Companies Income Tax, Dividend, Section 19, Tax Liability
- Level: Level 2
- Topic: Companies Income Tax (CIT)
- Series: MAY 2019
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