Stamp Duty – NBC Institute

AT – Nov 2022 – L3 – Q5 – Taxation and Corporate Governance

Analyze the tax implications for Yemmysea Beverages Limited’s proposed merger and acquisition arrangements, covering scenarios where a company absorbs another, a merger results in business cessation, and a business is sold or transferred. Additionally, explain the regulatory powers of the FIRS in mergers and acquisitions.

Question

In its bid to increase market power, growth, and enhance operating economies, the Board of Directors of a medium-sized beverage company, Yemmysea Beverages Limited, located in Abeokuta, is considering proposals for a merger or acquisition with another business entity in the same industry. The Chairman of the Board found all the proposals attractive.

However, the Financial Accountant advised that the Board should consider the tax implications associated with each proposed merger or acquisition arrangement. To address this, a reputable tax consulting firm, experienced in mergers, acquisitions, and reorganizations, was recommended to provide expert analysis.

Your firm has now been approached to offer professional advice on the tax implications of each of the following merger or acquisition arrangements:

Proposal 1: When an existing company absorbs another existing company.
Proposal 2: When a merger results in the cessation of business.
Proposal 3: When a business is sold or transferred.

Required:

As the company’s Tax Consultant, submit a report to the Managing Director explaining the following:

Tax implications when an existing company absorbs another existing company.
(5 Marks)
Tax implications when a merger results in the cessation of business.
(3 Marks)
Tax implications when a business is sold or transferred.
(3 Marks)
The powers of the Federal Inland Revenue Service (FIRS) on issues concerning mergers and acquisitions of companies.
(4 Marks)

Total: 15 Marks

Answer

Find Related Questions by Tags, levels, etc.

Tags: Asset Transfer, Business Cessation, Capital Gains Tax (CGT), Compliance, Corporate Restructuring, FIRS Authority, Merger and Acquisition Tax Implications, Stamp Duty, Tax Reliefs, VAT
Level: Level 3

Topic: Taxation and Corporate Governance
Series: NOV 2022

TAX – May 2021 – L1 – SA – Q12 – Stamp Duties

Objective question to identify what is not assessed on an ad-valorem basis.

Question

Which of the following is NOT assessed on ad-valorem basis?
A. Share capital of companies
B. Mortgage and debenture loans
C. Property valuation
D. Promissory notes
E. Admission as solicitor or notary public

Answer

Find Related Questions by Tags, levels, etc.

Tags: Ad-Valorem, Assessment, Mortgage, Property Valuation, Stamp Duty
Level: Level 1

Topic: Stamp Duties
Series: MAY 2021

PT – Dec 2023 – L2 – Q4a – Corporate Tax Liabilities

Explanation of the tax implications of transferring retained earnings to share capital, including deemed dividend tax and stamp duty.

Question

A Nigerian investor (Niger Ltd) in Ghana has the following information relating to its business:

Year	Revaluation Reserves (GH¢)	Share Capital (GH¢)	Retained Earnings (GH¢)
2021	250,000	1,000,000	1,200,000
2020	100,000	600,000	1,350,000

Required:
With relevant computations, comment on the tax implication of the transfer from Retained Earnings to Share Capital. (8 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Corporate Tax, Deemed Dividend, Retained Earnings, Share Capital, Stamp Duty
Level: Level 2

Topic: Corporate Tax Liabilities
Series: DEC 2023

TX – May 2019 – L3 – Q1a – Tax planning-+

Analyze the tax implications for a company increasing its stated capital by transferring funds from income surplus.

Question

Management of Kwame Enterprise Ltd considers increasing its stated capital by transferring GH¢600,000 from Income Surplus in 2019 year of assessment in its bid to expand its business horizon in future. The management of the company intends to consult widely on the taxability, if any, on this line of action.

Required:

Assess the tax implication of this funding arrangement by Management of Kwame Enterprise Ltd.
(3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Dividend Withholding Tax, Income Surplus, Stamp Duty, Stated Capital
Level: Level 3

Topic: Tax administration in Ghana
Series: MAY 2019

AT – NOV 2021 – L3 – Q1b – Permanent Establishment | International Taxation

Discusses the tax implications of establishing a permanent establishment or a subsidiary in Ghana.

Question

Muda Atesigbe is a major shareholder of Malka Ltd, a company based in Dubai–United Arab Emirates. As part of giving the company a global outlook, it intends to have a presence in Ghana. What is not too clear to the company’s management is the mode of entry into the country that would serve its business interests. It is contemplating establishing a company in Ghana or using the Permanent Establishment route to make its presence in Ghana.

Required:
He has tasked you, as a final level student of the Institute of Chartered Accountants, Ghana, to advise him on the tax implications of both routes and which is a better option. (8 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Branch Profit, Interest Deduction, Permanent Establishment, Stamp Duty, Subsidiary, Tax implications
Level: Level 3

Topic: International taxation, Permanent establishment
Series: NOV 2021

AT – Nov 2017 – L3 – Q3c – Business income – Corporate income tax

Identifying tax exposure on transfer from income surplus to stated capital.

Question

In order to increase its stated capital, XYZ Ltd transferred an amount from its income surplus account. As a tax advisor, identify the types of taxes XYZ Ltd is exposed to on the above arrangement.

(4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Corporate Tax, Dividend tax, Stamp Duty
Level: Level 3

Topic: Business income - Corporate income tax
Series: NOV 2017

AT – Nov 2022 – L3 – Q5 – Taxation and Corporate Governance

Analyze the tax implications for Yemmysea Beverages Limited’s proposed merger and acquisition arrangements, covering scenarios where a company absorbs another, a merger results in business cessation, and a business is sold or transferred. Additionally, explain the regulatory powers of the FIRS in mergers and acquisitions.

Question

Your firm has now been approached to offer professional advice on the tax implications of each of the following merger or acquisition arrangements:

Proposal 1: When an existing company absorbs another existing company.
Proposal 2: When a merger results in the cessation of business.
Proposal 3: When a business is sold or transferred.

Required:

As the company’s Tax Consultant, submit a report to the Managing Director explaining the following:

Tax implications when an existing company absorbs another existing company.
(5 Marks)
Tax implications when a merger results in the cessation of business.
(3 Marks)
Tax implications when a business is sold or transferred.
(3 Marks)
The powers of the Federal Inland Revenue Service (FIRS) on issues concerning mergers and acquisitions of companies.
(4 Marks)

Total: 15 Marks

Answer

Find Related Questions by Tags, levels, etc.

Tags: Asset Transfer, Business Cessation, Capital Gains Tax (CGT), Compliance, Corporate Restructuring, FIRS Authority, Merger and Acquisition Tax Implications, Stamp Duty, Tax Reliefs, VAT
Level: Level 3

Topic: Taxation and Corporate Governance
Series: NOV 2022

TAX – May 2021 – L1 – SA – Q12 – Stamp Duties

Objective question to identify what is not assessed on an ad-valorem basis.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Ad-Valorem, Assessment, Mortgage, Property Valuation, Stamp Duty
Level: Level 1

Topic: Stamp Duties
Series: MAY 2021

PT – Dec 2023 – L2 – Q4a – Corporate Tax Liabilities

Explanation of the tax implications of transferring retained earnings to share capital, including deemed dividend tax and stamp duty.

Question

A Nigerian investor (Niger Ltd) in Ghana has the following information relating to its business:

Year	Revaluation Reserves (GH¢)	Share Capital (GH¢)	Retained Earnings (GH¢)
2021	250,000	1,000,000	1,200,000
2020	100,000	600,000	1,350,000

Required:
With relevant computations, comment on the tax implication of the transfer from Retained Earnings to Share Capital. (8 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Corporate Tax, Deemed Dividend, Retained Earnings, Share Capital, Stamp Duty
Level: Level 2

Topic: Corporate Tax Liabilities
Series: DEC 2023

TX – May 2019 – L3 – Q1a – Tax planning-+

Analyze the tax implications for a company increasing its stated capital by transferring funds from income surplus.

Question

Required:

Assess the tax implication of this funding arrangement by Management of Kwame Enterprise Ltd.
(3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Dividend Withholding Tax, Income Surplus, Stamp Duty, Stated Capital
Level: Level 3

Topic: Tax administration in Ghana
Series: MAY 2019

AT – NOV 2021 – L3 – Q1b – Permanent Establishment | International Taxation

Discusses the tax implications of establishing a permanent establishment or a subsidiary in Ghana.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Branch Profit, Interest Deduction, Permanent Establishment, Stamp Duty, Subsidiary, Tax implications
Level: Level 3

Topic: International taxation, Permanent establishment
Series: NOV 2021

AT – Nov 2017 – L3 – Q3c – Business income – Corporate income tax

Identifying tax exposure on transfer from income surplus to stated capital.

Question

In order to increase its stated capital, XYZ Ltd transferred an amount from its income surplus account. As a tax advisor, identify the types of taxes XYZ Ltd is exposed to on the above arrangement.

(4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Corporate Tax, Dividend tax, Stamp Duty
Level: Level 3

Topic: Business income - Corporate income tax
Series: NOV 2017

Question Tag: Stamp Duty

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AT – Nov 2022 – L3 – Q5 – Taxation and Corporate Governance

TAX – May 2021 – L1 – SA – Q12 – Stamp Duties

Objective question to identify what is not assessed on an ad-valorem basis.

PT – Dec 2023 – L2 – Q4a – Corporate Tax Liabilities

Explanation of the tax implications of transferring retained earnings to share capital, including deemed dividend tax and stamp duty.

TX – May 2019 – L3 – Q1a – Tax planning-+

Analyze the tax implications for a company increasing its stated capital by transferring funds from income surplus.

AT – NOV 2021 – L3 – Q1b – Permanent Establishment | International Taxation

Discusses the tax implications of establishing a permanent establishment or a subsidiary in Ghana.

AT – Nov 2017 – L3 – Q3c – Business income – Corporate income tax

Identifying tax exposure on transfer from income surplus to stated capital.

AT – Nov 2022 – L3 – Q5 – Taxation and Corporate Governance

TAX – May 2021 – L1 – SA – Q12 – Stamp Duties

Objective question to identify what is not assessed on an ad-valorem basis.

PT – Dec 2023 – L2 – Q4a – Corporate Tax Liabilities

Explanation of the tax implications of transferring retained earnings to share capital, including deemed dividend tax and stamp duty.

TX – May 2019 – L3 – Q1a – Tax planning-+

Analyze the tax implications for a company increasing its stated capital by transferring funds from income surplus.

AT – NOV 2021 – L3 – Q1b – Permanent Establishment | International Taxation

Discusses the tax implications of establishing a permanent establishment or a subsidiary in Ghana.

AT – Nov 2017 – L3 – Q3c – Business income – Corporate income tax

Identifying tax exposure on transfer from income surplus to stated capital.

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Question Tag: Stamp Duty

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AT – Nov 2022 – L3 – Q5 – Taxation and Corporate Governance

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TAX – May 2021 – L1 – SA – Q12 – Stamp Duties

Objective question to identify what is not assessed on an ad-valorem basis.

You're reporting an error for "TAX – May 2021 – L1 – SA – Q12 – Stamp Duties"

PT – Dec 2023 – L2 – Q4a – Corporate Tax Liabilities

Explanation of the tax implications of transferring retained earnings to share capital, including deemed dividend tax and stamp duty.

You're reporting an error for "PT – Dec 2023 – L2 – Q4a – Corporate Tax Liabilities"

TX – May 2019 – L3 – Q1a – Tax planning-+

Analyze the tax implications for a company increasing its stated capital by transferring funds from income surplus.

You're reporting an error for "TX – May 2019 – L3 – Q1a – Tax planning-+"

AT – NOV 2021 – L3 – Q1b – Permanent Establishment | International Taxation

Discusses the tax implications of establishing a permanent establishment or a subsidiary in Ghana.

You're reporting an error for "AT – NOV 2021 – L3 – Q1b – Permanent Establishment | International Taxation"

AT – Nov 2017 – L3 – Q3c – Business income – Corporate income tax

Identifying tax exposure on transfer from income surplus to stated capital.

You're reporting an error for "AT – Nov 2017 – L3 – Q3c – Business income – Corporate income tax"

AT – Nov 2022 – L3 – Q5 – Taxation and Corporate Governance

You're reporting an error for "AT – Nov 2022 – L3 – Q5 – Taxation and Corporate Governance"

TAX – May 2021 – L1 – SA – Q12 – Stamp Duties

Objective question to identify what is not assessed on an ad-valorem basis.

You're reporting an error for "TAX – May 2021 – L1 – SA – Q12 – Stamp Duties"

PT – Dec 2023 – L2 – Q4a – Corporate Tax Liabilities

Explanation of the tax implications of transferring retained earnings to share capital, including deemed dividend tax and stamp duty.

You're reporting an error for "PT – Dec 2023 – L2 – Q4a – Corporate Tax Liabilities"

TX – May 2019 – L3 – Q1a – Tax planning-+

Analyze the tax implications for a company increasing its stated capital by transferring funds from income surplus.

You're reporting an error for "TX – May 2019 – L3 – Q1a – Tax planning-+"

AT – NOV 2021 – L3 – Q1b – Permanent Establishment | International Taxation

Discusses the tax implications of establishing a permanent establishment or a subsidiary in Ghana.

You're reporting an error for "AT – NOV 2021 – L3 – Q1b – Permanent Establishment | International Taxation"

AT – Nov 2017 – L3 – Q3c – Business income – Corporate income tax

Identifying tax exposure on transfer from income surplus to stated capital.

You're reporting an error for "AT – Nov 2017 – L3 – Q3c – Business income – Corporate income tax"

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