Tax Treatment – NBC Institute

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

AT – Aug 2022 – L3 – Q1a – International taxation

Tax treatment for a non-resident company using a subsidiary to execute a project.

Question

Jantua Ltd (Jantua) is a company incorporated in the Republic of Israel with subsidiaries across other countries, including Frankaa Company Ltd (Frankaa) in Ghana. All subsidiaries were incorporated in their respective countries by Jantua.

Jantua won a contract with the Ministry of Roads and Highways to construct a road in Ghana. Jantua used its subsidiary, Frankaa, to carry out the project. Jantua billed the Ministry of Roads and Highways for the work done. Likewise, Frankaa billed Jantua for management and technical services on the road project.

Required:
What is the tax treatment of this arrangement?
(4 marks)

Answer

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Tags: Contracting services, Non-resident company, Permanent Establishment, Tax Treatment, Withholding Tax
Level: Level 3

Topic: International taxation
Series: AUG 2022

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

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

Find Related Questions by Tags, levels, etc.

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

Topic: Income Tax Liabilities
Series: MAR 2024

AT – Aug 2022 – L3 – Q1a – International taxation

Tax treatment for a non-resident company using a subsidiary to execute a project.

Question

Required:
What is the tax treatment of this arrangement?
(4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Contracting services, Non-resident company, Permanent Establishment, Tax Treatment, Withholding Tax
Level: Level 3

Topic: International taxation
Series: AUG 2022

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

Question Tag: Tax Treatment

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

Explain the tax treatment of a gift received.

AT – Aug 2022 – L3 – Q1a – International taxation

Tax treatment for a non-resident company using a subsidiary to execute a project.

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.

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

Explain the tax treatment of a gift received.

AT – Aug 2022 – L3 – Q1a – International taxation

Tax treatment for a non-resident company using a subsidiary to execute a project.

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.

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

Explain the tax treatment of a gift received.

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AT – Aug 2022 – L3 – Q1a – International taxation

Tax treatment for a non-resident company using a subsidiary to execute a project.

You're reporting an error for "AT – Aug 2022 – L3 – Q1a – International taxation"

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"

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

Explain the tax treatment of a gift received.

You're reporting an error for "PT – Mar 2024 – L2 – Q5c – Income Tax Liabilities"

AT – Aug 2022 – L3 – Q1a – International taxation

Tax treatment for a non-resident company using a subsidiary to execute a project.

You're reporting an error for "AT – Aug 2022 – L3 – Q1a – International taxation"

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"

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