- 20 Marks
STP – Aug 2016 – L2 – Q4 – Bonded Warehouses
Discuss advantages and disadvantages of bonded warehouses for tax payments.
Question
(a) Does your country have bonded warehouses in which goods may be stored without triggering a taxable presence?
Required
Discuss three advantages and three disadvantages that the operation of a bonded warehouse will extend to traders in the payment of taxes.
b) Professor Zoel is a visiting professor from the University of South Africa, on sabbaticals in Ghana. He was invited by the head of the Business School, Angella University here in Ghana on 1 January 2016. After a three week closed door brush up, he was persuaded by his host, Prof Mensah, to fill in a vacancy in the department and also to stay in Ghana to the end of his sabbaticals. Prof Zoel has decided to take up the teaching appointment with Angella University.
AngellaUniversity intends to pay Prof Zoel from grants received from Columbia University (USA) marked for a special research work in Ghana. Prof Mensah has assured Prof Zoel that his (Prof Zoel) pay will be paid in USD directly to his bank account in South Africa. Prof Zoel will also receive standard benefit package in cash (relocation allowance, Ghana business travel expense allowance, accommodation, etc.) which will be paid/given to him in Ghana by Angella University.
His salary will be paid by Columbia University on a bimonthly basis and there will be no chargeback of any cost to any other location.
Prof Zoel finds his new working conditions particularly rewarding since he will additionally receive his full Professor’s salary as normally paid by his mother University employer in South Africa.
Prof Zoel is a little disturbed because he was not sure about the tax implications of his combined multiple salaries as he earns allowances in Ghana, is paid by Columbia University for work done in Ghana into his bank account in South Africa and additionally earns his professorial salary in South Africa.
As a Chartered Tax Advisor, Prof Zoel has referred this apparent tax difficulty to you for your advice. Prof Zoel intends to live the full term of his sabbaticals in Ghana which could run for at least 2 years.
Required:
Kindly identify and advise Prof Zoel on the tax implications of his entire earnings for this sabbatical in Ghana.
Find Related Questions by Tags, levels, etc.
- Tags: Double Taxation, Expatriate Income, Ghana, Payroll Tax, Tax residency
- Level: Level 2
- Topic: Tax Administration and Management
- Series: AUG 2016
