Exempt supplies – Knowsia

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.

Question

(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.

Answer

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Tags: Apportionment Formula, Exempt supplies, Input Tax, Taxable Supplies, VAT
Level: Level 3

Topic: Strategic Indirect Tax Management
Series: FEB 2007

AT – Nov 2024 – L3 – Q4a – Value Added Tax Deductibility

Determine the deductible input VAT for a VAT-registered company operating multiple business divisions under different VAT treatments.

Question

The two scenarios below relate to ClearTel LTD, a VAT-registered company in Ghana. Each scenario is an independent scenario and should be considered separately.

Scenario 1

ClearTel LTD operates three divisions (XYZ). Division X deals in the sale of computers and mobile phones. Division Y deals in the sale of locally-manufactured sanitary towels. Division Z is into the supply of fertilizers to farmers in Ghana.

Revenue from each division for 2024 is shown below:

Division	Description	Revenue (GH¢)
X	Computers and mobile phones	1,005,700
Y	Sale of locally-manufactured sanitary towels	2,500,000
Z	Supply of fertilizers to farmers	78,800,000

ClearTel LTD has incurred total input VAT of GH¢50,500,000, and the Finance Manager of the company is unable to determine specifically which division of the business this input VAT amount relates to.

Required:

Determine the amount of input VAT ClearTel LTD can deduct, in line with the provisions of the Value Added Tax Act, 2013 (Act 870 as amended). Justify your answer

Answer

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Tags: Deductibility, Exempt supplies, Input Tax, Mixed Taxation, VAT, Zero-rated supplies
Level: Level 3

Topic: Tax administration in Ghana, Value-Added Tax (VAT)
Series: Nov 2024

PT – Nov 2021 – L2 – Q2d – Value-Added Tax (VAT), Customs, and Excise Duties

Explain what constitutes exempt supplies under the VAT Act.

Question

What constitutes exempt supplies?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Exempt supplies, Ghana Revenue Authority, Supply of Goods, VAT, VAT Exemptions
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: NOV 2021

AT – Nov 2017 – L3 – Q1a – Tax administration in Ghana

Distinguishing between zero-rated and exempt supplies under the VAT Act.

Question

There has been misconceptions about the application of zero-rated supply and exempt supplies under the VAT Act. In order to help clear this misconception, distinguish between zero-rated supply and exempt supplies under the VAT Act 2013, (Act 870).

(5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Exempt supplies, Taxation, VAT, Zero-rated supplies
Level: Level 3

Topic: Tax administration in Ghana
Series: NOV 2017

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.

Question

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.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Apportionment Formula, Exempt supplies, Input Tax, Taxable Supplies, VAT
Level: Level 3

Topic: Strategic Indirect Tax Management
Series: FEB 2007

AT – Nov 2024 – L3 – Q4a – Value Added Tax Deductibility

Determine the deductible input VAT for a VAT-registered company operating multiple business divisions under different VAT treatments.

Question

The two scenarios below relate to ClearTel LTD, a VAT-registered company in Ghana. Each scenario is an independent scenario and should be considered separately.

Scenario 1

Revenue from each division for 2024 is shown below:

Division	Description	Revenue (GH¢)
X	Computers and mobile phones	1,005,700
Y	Sale of locally-manufactured sanitary towels	2,500,000
Z	Supply of fertilizers to farmers	78,800,000

Required:

Determine the amount of input VAT ClearTel LTD can deduct, in line with the provisions of the Value Added Tax Act, 2013 (Act 870 as amended). Justify your answer

Answer

Find Related Questions by Tags, levels, etc.

Tags: Deductibility, Exempt supplies, Input Tax, Mixed Taxation, VAT, Zero-rated supplies
Level: Level 3

Topic: Tax administration in Ghana, Value-Added Tax (VAT)
Series: Nov 2024

PT – Nov 2021 – L2 – Q2d – Value-Added Tax (VAT), Customs, and Excise Duties

Explain what constitutes exempt supplies under the VAT Act.

Question

What constitutes exempt supplies?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Exempt supplies, Ghana Revenue Authority, Supply of Goods, VAT, VAT Exemptions
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: NOV 2021

AT – Nov 2017 – L3 – Q1a – Tax administration in Ghana

Distinguishing between zero-rated and exempt supplies under the VAT Act.

Question

(5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Exempt supplies, Taxation, VAT, Zero-rated supplies
Level: Level 3

Topic: Tax administration in Ghana
Series: NOV 2017

Question Tag: Exempt supplies

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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.

AT – Nov 2024 – L3 – Q4a – Value Added Tax Deductibility

Determine the deductible input VAT for a VAT-registered company operating multiple business divisions under different VAT treatments.

PT – Nov 2021 – L2 – Q2d – Value-Added Tax (VAT), Customs, and Excise Duties

Explain what constitutes exempt supplies under the VAT Act.

AT – Nov 2017 – L3 – Q1a – Tax administration in Ghana

Distinguishing between zero-rated and exempt supplies under the VAT Act.

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.

AT – Nov 2024 – L3 – Q4a – Value Added Tax Deductibility

Determine the deductible input VAT for a VAT-registered company operating multiple business divisions under different VAT treatments.

PT – Nov 2021 – L2 – Q2d – Value-Added Tax (VAT), Customs, and Excise Duties

Explain what constitutes exempt supplies under the VAT Act.

AT – Nov 2017 – L3 – Q1a – Tax administration in Ghana

Distinguishing between zero-rated and exempt supplies under the VAT Act.

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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.

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AT – Nov 2024 – L3 – Q4a – Value Added Tax Deductibility

Determine the deductible input VAT for a VAT-registered company operating multiple business divisions under different VAT treatments.

You're reporting an error for "AT – Nov 2024 – L3 – Q4a – Value Added Tax Deductibility"

PT – Nov 2021 – L2 – Q2d – Value-Added Tax (VAT), Customs, and Excise Duties

Explain what constitutes exempt supplies under the VAT Act.

You're reporting an error for "PT – Nov 2021 – L2 – Q2d – Value-Added Tax (VAT), Customs, and Excise Duties"

AT – Nov 2017 – L3 – Q1a – Tax administration in Ghana

Distinguishing between zero-rated and exempt supplies under the VAT Act.

You're reporting an error for "AT – Nov 2017 – L3 – Q1a – Tax administration in Ghana"

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.

You're reporting an error for "STP – Feb 2007 – L3 – Q4 – Employee Loan Taxation"

AT – Nov 2024 – L3 – Q4a – Value Added Tax Deductibility

Determine the deductible input VAT for a VAT-registered company operating multiple business divisions under different VAT treatments.

You're reporting an error for "AT – Nov 2024 – L3 – Q4a – Value Added Tax Deductibility"

PT – Nov 2021 – L2 – Q2d – Value-Added Tax (VAT), Customs, and Excise Duties

Explain what constitutes exempt supplies under the VAT Act.

You're reporting an error for "PT – Nov 2021 – L2 – Q2d – Value-Added Tax (VAT), Customs, and Excise Duties"

AT – Nov 2017 – L3 – Q1a – Tax administration in Ghana

Distinguishing between zero-rated and exempt supplies under the VAT Act.

You're reporting an error for "AT – Nov 2017 – L3 – Q1a – Tax administration in Ghana"

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