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  • 20 Marks

PBL – APR 2024 – L1 – Q1 – Negligence in Consumer Product Liability

Advise Yaa Asantewaa on a negligence case against Denice Breweries after she was injured due to kerosene found in a bottle of Denice Ginger Beer.

Yaa Asantewaa bought and drank Denice Ginger Beer manufactured by Denice Breweries. She got injured because kerosene was found in the bottle of the ginger beer. Advise Yaa Asantewaa on a case of negligence against Denice Breweries.

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  • 20 Marks

STP – Feb 2018 – L2 – Q4- Taxation and Operating Strategies

Calculate Honson Plc's tax liability for Kumasi/Accra, advise on Nsawam, and discuss non-tax factors for facility location.

Honson Pic, a UK-based manufacturing company, is planning to build a new processing facility in Ghana. The Chief Executive Officer in a meeting with Management needs to decide whether to cite the facility in Accra or in Kumasi. Market intelligence has no preference for citing the facility either in Kumasi or Accra since information gathered indicate that business activities would largely be same in Kumasi and Accra for the next 10 years.

The following forecast information is relevant for the decision-making process being considered by management.

Kumasi Accra GH¢ GH¢

Required: i. Calculate Hamson Plc’s income tax liability for each proposed location for the first year. ii. Would you advise Hamson Plc to consider citing the facility in Nsawam, taking into consideration the close proximity of Nsawam to Accra? iii. Discuss three (3) non-tax factors that Hamson UK Plc may consider in the decision-making process to locate the facility either in Kumasi, Accra or elsewhere in the country.

b). With reference to the Income Tax Act, 2015 (Act 896) explain the following: i. Private Ruling issued by the Commissioner-General: (2 marks) ii. Conditions under which a Private Ruling will be binding on the Commissioner-General and on the person to whom the Private Ruling is issued.

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  • 18 Marks

STP – Feb 2018 – L2 – Q3 – Tax Administration

Explain categories of tax representatives for companies and local authorities under VAT Act 870, and their responsibilities.

The VAT Act, 2013 (Act 870) accepts that tax consultants may act in a representative capacity for and on behalf of the substantive taxpayer. This provision in the law encourages and accepts the professional development of private tax practitioners but lays down the specific parameters which would qualify such professionals to act as taxpayers’ representatives.

As the Tax Partner for ABC Practice Firm, a new entrant of the firm has approached you with a request to educate him on the types of persons who can act in a representative capacity for an on behalf of the taxpayer.

Required a) With reference to the provisions of Act 870, specify the categories of persons who qualify to be declared by the Commissioner-General as a representative person of: i. a Company; ii. a Local Authority?                                                                              b) What are the responsibilities of the tax representative of a taxable person?

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  • 20 Marks

STP – Feb 2018 – L2 – Q2 – VAT Credit Notes

Explain circumstances for issuing VAT Credit Notes and tax implications for prior period supplies.

a) As a Tax Consultant, you receive a note from Mr. Emilio Ditto, the Managing Director of a company based in the United Kingdom seeking to expand its operations in Africa through the opening of an office in Accra. He is interested in discussing with you details of some aspects of the VAT regime in Ghana particularly, the basic VAT concepts on the following:
(i) Under what circumstances can a VAT-registered person issue a Credit Note to cancel or amend a VAT invoice?
(ii) What are the tax liability implications for a VAT-registered person who issues a Credit Note to a customer for a supply that was made in a previous tax period?

Required:
Provide a brief for Mr. Emilio Ditto giving your responses to the issues raised above, with reference to the VAT Act, 2013 (Act 870) as amended.

b) Under the provisions of the Excise Duty Act, 2014 (Act 878), the Commissioner-General may, based on any information available, make an assessment of the amount of excise duty payable by a person.

Required:
State four (4) different circumstances under which the Commissioner-General may exercise the discretion to make an assessment of the excise duty payable by a person.

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  • 20 Marks

STP – Feb 2018 – L2 – Q1 – Duty Drawback

Explain "drawback" under Customs Act 2015 and circumstances for goods deemed exported for drawback.

a) In recent times the export business community has increasingly expressed concern about the issue of duty drawback management by the Ghana Revenue Authority (GRA), particularly undue delays and non-payment of duty drawback claims as accrued over the years.

As an expert tax consultant, you have been invited by the Ghana National Chamber of Commerce for a technical meeting with representatives of the business community on the duty drawback regime.

You are required to prepare a brief paper for discussion at the meeting covering the following areas:

i) An explanation of the term “drawback” as prescribed under the provisions of the Customs Act, 2015 (Act 891), including the two different categories of duty drawback that may be paid by the Commissioner-General.

ii. Under what circumstances will goods be deemed to have been exported for drawback purposes as prescribed under Act 891?

b) Corncob Industries Ltd. a company based in the Central Region of Ghana which processes agricultural products is contemplating diversifying its product lines to take advantage of an identified market potential for a particular maize-based cereal. This will require:

  • Retrofitting one of their production machines which will enhance its value and performance by about 75%.
  • Repairs to the equipment used for packaging the products. This will enhance its value by approximately 10%.
  • Servicing of a component of the sterilization unit which is still under the manufacturer’s warranty.
    Management of the company has concluded discussions with the manufacturer of the machinery, equipment and sterilization unit based in France to undertake the retrofitting, repairs and servicing, if Corncob Industries Ltd. can have the items shipped to their factory in Milan, Italy for the purpose.
    Alternatively, the manufacturer’s technicians may be brought over to Ghana with the necessary materials to undertake the retrofitting and repairs at the factory premises of Corncob Industries Ltd. Management of Corncob Ind. Ltd. is not certain of the Customs implications of shipping the items out to Italy for the works, which will take four weeks and subsequently re-importing the processed items into the country.

Required:
With reference to the Customs Act, 2015 (Act 891), explain to Management of Corncob Industries Ltd. details of the customs procedure for re-importation of goods after outward processing and the related liability to customs duty, with respect to the following issues:
i. condition under which the outward processing procedure may be used.
ii. period for discharge of the outward processing procedure.
iii. import duty liability on the goods when re-imported into Ghana after processing abroad.

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  • 20 Marks

STP – Feb 2007 – L3 – Q4 – Employee Loan Taxation

Advise on tax implications of a $300M loan and bonus for Dr. Ababio, including relevant Tax Act provisions.

(a). Dr. Ababio discusses an engagement she recently accepted with an investment banker with you for advice. She indicates that one of the recruiting inducements that convinced her to accept the position is a $300M loan from her employer. She will receive the loan proceeds on her first day of work and must sign a note to repay the loan plus accrued interest in five equal annual installments.

The employer will forgive any amount of the unpaid debt if Dr. Ababio dies, becomes disabled, or is terminated from employment through no fault of her own. Dr. Ababio’s contract provides that the employer will pay an annual bonus equal to each loan repayment. The contract stipulates that the bonus must be applied to the repayment of her loan.

Required:
i) Advise Dr. Ababio on the implications, if any, of this engagement provisions.
ii) Discuss any three provisions in the Tax Act which will support the position the Commissioner will take in respect of the taxability or otherwise of this engagement provision.

(b). The Free Zone Act declares a 10-year tax holiday for Free Zone Operators. Sweet Entities Inc. desires to set up in the Free Zone enclave but requires an understanding of the practical tax concessions granted to free operators. To this effect, the Tax Director of Sweet Entities Inc. requires that you do a practical presentation of the flow of the corporate tax-exempt concession as extended to the operator. He therefore provides you with the following business forecast for the first 10-year period as follows.
All figures in $M

Year 1 2 3 4 5 6 7 8 9 10
Adjusted Profit 10 60 150 500 1,000 1,000 1,000 520 600 620
Capital Allowance 1000 600 300 150 50 20 20 600 340 200

Compute the tax position, if any, of Sweet Entities Inc. for the exempt period.

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  • 15 Marks

STP – Feb 2020 – L2 – Q5 – Anti-Avoidance Provisions

Identify and discuss three anti-avoidance provisions in the Income Tax Act, 2015 (Act 896) and their limitations on tax planning.

Although tax planners have the liberty to devise schemes which reduce the tax liability of their clients, the Income Tax Act, 2015 (Act 896) contains provisions which limit tax planning schemes.

Required:
Identify any three (3) anti-avoidance provisions in Act 896 and discuss how each of these provisions places a limitation on the ability of a person to engage in tax planning.

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  • 20 Marks

STP – Feb 2007 – L3 – Q3 – Venture Capital Taxation

Present tax concessions for Venture Capital Operators compared to traditional banks.

As part of the post qualification requirements of The Chartered Institute of Taxation, you have been invited to do a presentation on the topic “Venture Capital Fund” to a select group of business men, tax professionals, financial institutions and students.

Invitation
Members of the Ghana Institute of Taxation and the Institute of Bankers wish to use this opportunity to strengthen the cordial relationship subsisting between them and have therefore invited you to do a presentation on the tax effects of Venture Capital Operators as compared with that of the traditional financial institutions.

Required:
Please prepare a presentation as required under Invitation above clearly distinguishing between Tax concessions granted to a Venture Capital as compared with the Bank.

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  • 20 Marks

STP – Feb 2007 – L3 – Q2 – Employee Taxation

Outline Ghanaian tax and social security implications for a French employee working in Ghana under a Double Tax Treaty.

Mr. Nor Amid, the Human Capital Resource Person of Amanda Inc, an entity registered in France sends a brief note to you in respect of a duty tour of an employee as follows:
“Amanda is sending an employee to Ghana and I am hoping that you could provide guidance for Amanda. Our understanding is as that:

  • The employee is French and may be kept on the French payroll
  • The employee’s remuneration will be cross charged to Amanda in France and Ghana
  • The employee, according to French Tax Law, will be French for tax purposes
  • The employee will spend 40% or less of his time in France
  • The employee will spend between 40 to 60% of his time in Ghana and whilst in Ghana the employee will be accommodated in hotels, will have free use of car with fuel and free meal.
  • The employee will spend his time in Ghana from 7 to 25 days at a time depending on need.

Would you kindly provide us with a brief outline of the Ghanaian tax and social security implications for Amanda and the employee? Kindly note that Ghana has an operating ‘Double Tax Treaty’ with France.

Required:
(a). Please submit a memo to respond to the concerns raised by Mr. Nor Amid.

(b). Ghana has general tax-avoidance rules in the tax acts. Kindly discuss any three practice methods adopted by the Revenue Agencies to regulate transfer pricing between related parties?

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  • 22 Marks

STP – Feb 2020 – L2 – Q4 – Business Entity Tax Implications

Advise on tax implications of establishing a company, partnership, or sole proprietorship and identify which offers the least tax exposure for an investor.

As a renowned tax consultant, a potential investor in the real estate sector in Ghana is seeking your expert opinion on the tax implications of establishing a company, a partnership or a sole proprietorship and which form of the business organisations gives the least tax exposure for an investor.

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  • 20 Marks

IT – Aug 2020 – L1 – Q4 – Tax Treaties and Interpretation

Explain how the UN Model Tax Convention addresses tax discrimination elimination.

a) How does the UN Model Tax Convention deal with the elimination of tax discrimination?

b) “The existence of bearer shares regime and bearer banks accounts in some jurisdictions threatens the standard on exchange of information for tax purposes.”

Required To what extent do bearer shares and bearer banks accounts affect the standard on exchange of information for tax purposes? Are there any benefits to the tax payers?

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  • 20 Marks

TAI – Feb 2020 – L1 – Q4 – Cash Transaction Problems

Explain three problems faced by tax authorities when assessing income of businesses with high cash transactions.

a) The accurate reporting of income and expenses by cash intensive businesses has been a biggest challenge to various Revenue Authorities.

Required i. Explain briefly three potential problems encountered when assessing the income of a business with high cash transactions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          (b)

The Income Tax Officer, on assessing the income of Ben J for the financial years 2018-2019 feels that Ben J has not disclosed the full income. He gives you the following particulars of assets and liabilities of Ben J as of 1st January 2018 and 1st January 2019

| 1-1-2018:: | Assets: | Cash in hand | 25,500 | | | | Inventory | 56,000 | | | | Sundry debtors | 41,500 | | | | Land and Building | 190,000 | | | | Wife’s Jewlery | 75,000 | | | Liabilities: | Owing to Ben J’s Brother | 40,000 | | | | Sundry creditors | 35,000 | | 1-1-2019 | Assets | Cash in hand | 16,000 | | | | Inventory | 91,500 | | | | Sundry debtors | 52,500 | | | | Land and Building | 190,000 | | | | Motor Car | 125,000 | | | | Wife’s Jeweler | 105,000 | | | | Loan to Ben J’s Brother | 20,000 | | | Liabilities: | Sundry creditors | 55,000 |

During the two years the domestic expenditure was GHS 4,000 per month. The declared income of the financial years was GHS105,000 for 2018 and GHS123,000 for 2019 respectively.

Required: I) State whether the Income-tax Officer’s contention is correct. Explain by giving your workings. (3 marks) ii) Outline the audit steps to verify the information submitted.

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  • 20 Marks

IT – Aug 2020 – L1 – Q3 – Business Presence and Characterization

Analyze tax consequences of CPL Group’s technical experts’ activities in Ghana for Mavie Limited.

Mavie Limited is resident entity in Ghana. Mavie Limited was established seven months ago when the Corona Virus 2019 (Covid-19) pandemic began. It sells personal protection equipment (PPE), including medical sanitizer, face and nose masks for self-protection against the infectious disease. The company was jointly owned by Eyra Foundation and Akusa S.A. on 40% and 60% shareholdings respectively. Eyra Foundation is resident in Ghana. Akusa S.A, is a company resident in South Africa and is 100% owned by CPL Group Plc., a multinational company resident in Netherland.

In the last six months, two technical experts from CPL visited Mavie Ltd on 3 months rotation to provide technical support to the staff of Mavie Ltd.

Last month Mavie Ltd declared an interim dividend and subsequently transferred Akusa’s share of the dividend.

The management of Mavie Ltd approached your firm, Emiraldo Consulting to advise them on the implication of the above transactions. You are a Chartered Tax Practitioner in the employment of Emiraldo Consulting and the Managing Partner requests you to draft the advice for Mavie Ltd.

Required Prepare a draft report setting out the tax consequences of

a. Dealings with CPL Group Ltd in Ghana.

b. Payment of dividend to Akusa S.A. by Mavie Limited.

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  • 20 Marks

IT – Aug 2020 – L1 – Q2 – Transfer Pricing Principles

Discuss importance of arm's length principle, its difficulties for MNEs, and alternative approaches.

a) How important is the arm’s length principle in international taxation? Identify two difficulties that it presents for multinational enterprises? Is there a better approach?

b) Eyra MA Limited a resident company in Singapore has several subsidiaries across the globe including Elik EM Engineering Limited in Ghana. Eyra MA Limited provides engineering, procurement and construction management services as its core business. The group’s global value chain include manufacturing, distribution, marketing and sales, research and development, procurement, logistics, financing, administration, after sales service, and human resource management. Eyra MA Limited has an intra-group services policy which stipulates that a holding company provides the services for related entities within the group on the basis that such an arrangement is beneficial to the group as a whole.

Required

i. Explain direct and indirect charging, and provide examples in the context of intra-group services within Eyra MA Limited.

ii. Identify potential chargeable group services, and non-chargeable services within the group structure.

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  • 20 Marks

IT – Aug 2020 – L1 – Q1 – Taxing Rights and Jurisdiction

Explain tax implications of Volta Airlines' activities under domestic law and DTA, focusing on UK incorporation and Ghana operations.

Volta Airlines is incorporated in the United Kingdom (UK) and is a newly registered aircraft operator, operating for the past few months. United Kingdom determines corporate tax residence on the basis of the place of incorporation and place of central management and control.

Directors of Volta Airlines live in Ghana. They appoint agents who retail the airline’s tickets on behalf of the company in Ghana. The tickets relate exclusively to three different categories of flight, all of which are within the United Kingdom, South Africa and Ghana

The airline also agreed under an International Airlines Technical Pool agreement to provide spare parts and maintenance services to other airlines landing at the Ghana’s Kotoka International Airport. Volta Airlines receives maintenance fees from these services performed in Ghana.

Volta Airlines also advertises the products of several multinational companies in magazines which it supplies on its aircraft. It receives advertising fees from these companies.

Required:

a. Within the context of domestic tax law and the Double Tax Agreement explain the tax implication of activities of Volta Airlines.

b. Which country has the jurisdiction to tax the corporate income of airlines? Give reasons for your

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  • 20 Marks

TAI – Feb 2020 – L1 – Q3 – Audit Evidence Sources

List and explain five significant sources of audit evidence and the nature of evidence expected from each.

a) The auditor should obtain sufficient and appropriate audit evidence in order to be able to form an audit opinion.

Required: a) Enumerate five (5) significant sources of audit evidence and for each source explain briefly the nature of evidence expected.

b) What is sufficient audit evidence depends upon auditor’s judgment. Explain three matters which influence such judgment.

c) Identify and explain three situations which restrict the auditor’s ability to obtain sufficient appropriate audit evidence. Give two examples for each situation.

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  • 20 Marks

ATP – Aug 2019 – L2 – Q5 – Individual Tax Liability

Compute Steve Mills’ 2018 tax liability, including salary, allowances, and reliefs.

Mr Steve Mills was employed as the Chief Executive Officer of Mpeasem Company Limited, on a monthly Salary of GH¢ 40,000.00, subject to 20% upward review after every two years. His appointment took effect from January 1, 2015. Mr Steve Mills is provided a soft furnished accommodation and a vehicle and a driver, which is fuelled by the company. He is also entitled to the following other allowances each month:
i. Responsibility: 2,000.00
ii. Accountable Entertainment: 500.00
iii. House / Garden Boy: 15% (Basic Salary)
iv. Clothing (Paid January 1 each year): 20% (Basic Salary)
v. Professional Allowance: 10% (Basic Salary)

During the year 2018, he received a total dividend of GH¢ 6,000.00 net of taxes from two companies where he has investments. The total number of ordinary shares respectively in Ebeyeyie Co. Ltd and Chinderi Oil Mills (Ghana) Ltd are 15,000 and 30,000. Mr Steve Mills contributes 5.5% of his basic Salary to SSNIT and 10% to the third tier Pension Fund to which his employer also contributes 5%. He is married and has three children. The eldest son is attending KNUST, and the rest are in Government approved Senior High Schools in Accra. His wife is a housewife and does not provide much for the up keep of the children. He provides for his 70 year old father. He has applied for and granted all reliefs. Mr Steve Mills represents the company at all state functions and programmes and is therefore expected to be decently dressed at all times. The industry standard also requires all employees to be decently dressed.

Annual Individual Tax Rates (Effective 1st January 2018)

GH¢ %
First 3,132 NIL
Next 840 5
Next 1,200 10
Next 33,720 17.5
Next 38,892 25

Required:
a. Compute the tax liability for Mr Steve Mills for 2018 year of Assessment.

b. Provide justification for the basis of your treatment of the transactions, where necessary.

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  • 20 Marks

ATP – Aug 2019 – L2 – Q4 – Notice of Assessmen

Explain Commissioner-General’s rights to issue Notice of Assessment and its contents.

a). You are a trainee in the office in Brown Green and Associates, a firm of Tax Practitioners. A gentleman, identified later as Mr Kwesi Sikasem walked in to the office fuming with anger saying that he had received a Notice of Assessment from the Ghana Revenue Authority demanding the payment of a total tax liability of 1.2 million Ghana cedis for 2017 and 2018 Years of Assessment. In the course of discussion you realised that he has been in business since October 2016.

Required:

Explain to Mr Kwesi Sikasem the rights of the Commissioner-General to issue a Notice of Assessment and state what is expected in a Notice of Assessment.

b). Mr Thomas Smith a retired employee of the US Border Security has approached you seek your advice on the possibility of forming a company as a Customs House Agent in Tema.

Required:

With reference to the Customs Act, 2015 (Act 891) as amended, advise Mr Thomas Smith on the categories of persons that can engage in the business of customs house agent

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  • 20 Marks

ATP – Aug 2019 – L2 – Q3 – Corporate Tax and Penalties

Compute Yentua Limited’s 2018 tax liabilities, including penalties, using financial statement data.

Yentua Limited is a company registered in Ghana under the Companies Act 1963, Act 179 on 15th September 2017. It started operations on 1st October, 2017. The company buys metal scraps both from internal and external sources and sells to the iron rod manufacturers in Tema. The company was not registered with the Ghana Revenue Authority and therefore has never submitted any tax returns on its operations. The activities of the company came to light when a team of Revenue Officers from the Enforcement unit of the Ghana Revenue Authority met the Managing Director and his staff in full operation. The team educated the Managing Director and his management team on importance of payment of taxes and registering with the Ghana Revenue Authority and submitting the tax returns to the Authorities regularly. The Managing Director then presented Tax Credit Certificates (TCC) totalling GH¢ 134,000 and receipts for duties paid on imported goods as taxes paid and therefore claimed his company was tax compliant. The Managing Director later approached you as a Tax Practitioner to help the company complete its tax returns on its business operations to Ghana Revenue Authority. The extracts from the company’s financial statement presented by the Finance officer for the year ended 30th September 2018 were as follows:

Yentua Limited
Income Statement

GH¢ GH¢
Turnover 7,800,000.00
Cost of Sales (6,929,300.00)
Gross Profit 870,700.00
Administration and General Expenses (660,000.00)
Net Profit 90,000.00

Note 2: Cost of Sales

GH¢
Local Purchases 4,400,000.00
Imports 1,580,000.00
Freight and Insurance 98,500.00
Import Duties 436,000.00
Cargo Truck 240,000.00
Repairs and Maintenance 52,000.00
Depreciation – Truck 48,000.00
Fuel and Lubricants 24,000.00
Transport and Handling 50,800.00
Total 6,929,300.00

Note 3: Administration and General Expenses

GH¢
Salaries and Allowances 285,000.00
Directors Remuneration 64,000.00
Consultancy Fees 90,000.00
Printing and Stationery 10,500.00
Rent (Office Building) 60,000.00
Rent (Residential) 36,000.00
Equipment Rentals 79,000.00
Utilities 35,500.00
Total 660,000.00

Required:
Determine the tax liabilities due from the company in respect of direct taxes for 2018 year of assessment, including any relevant penalties that are applicable. Corporate Tax rate applicable to the company is 25%.

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  • 20 Marks

ATP – Aug 2019 – L2 – Q2 – Indirect Taxes

Calculate NHIL, GET Fund, VAT, and Withholding Tax for Menuaa Manufacturing for October 2018.

Menuaa Manufacturing Limited (MML) produces iron rods for sale in both the domestic and foreign markets. The company is registered with the Ghana Revenue Authority for Value Added Tax (VAT). The company’s transactions during the month of October 2018 were as follows:

Transactions GH¢
Sales (VAT Inclusive) 756,000
Exports to Sierra Leone 120,000
Relief Supplies 48,000
Purchase of Rolling Equipment 55,500
Hotel Expenses for Staff at a workshop on the new amendment on the VAT law. (VAT Inclusive) 4,500
Stationery purchased for Administration work 15,600
Iron Ingot imported (CIF) 141,750
Local Purchases 50,000

Unless otherwise stated Sales and Purchases are all Value Added Tax exclusive. National Health Insurance and GET Fund Levies are also exclusive except where it has been specifically stated.
Required:
a. You are required to calculate the NHIL and GET fund levies, VAT payable, if any, and Withholding Tax for October 2018.

b. State the last date when each payment is due.

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