- 20 Marks
TAX – May 2023 – L2 – SA – Q2 – Personal Income Tax (PIT)
Differentiate employment contract types and explain tax residency rules for individuals.
Question
The Personal Income Tax Act Cap.P8 LFN, 2004 (as amended) defines “employment,” whilst the Labour Act Cap.L1 LFN, 2004 (as amended), defines “contract of employment.”
An individual’s liability to income tax is often determined by their residence status within a state during a particular assessment year. A taxpayer is liable to the tax authority in the territory where they are deemed resident for that assessment year.
Required:
a. Differentiate between “contract of employment” and “contract for employment.” (8 Marks)
b. Explain the rules guiding the determination of residence for SIX categories of individuals for tax purposes. (12 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Contract of Employment, Employment Contract, Income Tax, Residency, Taxpayer Liability
- Level: Level 2
- Topic: Personal Income Tax
- Series: MAY 2023
Report an error