Free Zone – Knowsia

AT – April 2022 – L3 – Q2b – Tax planning

Explain how a Free Zone Enterprise can mitigate its tax liabilities and benefit shareholders.

Question

Free Zone means area or building declared as a free zone by publication in commercial and industrial bulletins. It includes Single Factory Zones, Free Ports, Free Airports, and other specified areas. Free Zone operations are export-led and aimed at promoting foreign earnings for Ghana.

Required:
What mitigation measures will a Free Zone Enterprise adopt to reduce its tax liabilities and raise enough benefits to the shareholders?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Corporate Tax, Export, Free Zone, Tax Mitigation
Level: Level 3

Topic: Tax planning
Series: APR 2022

AT – Nov 2016 – L3 – Q4a – Tax administration in Ghana

Discuss the tax benefits that Pearl House Ltd stands to gain by operating in a Free Zone.

Question

a) Pearl House Ltd is a company incorporated in Ghana and contemplates applying for a license to operate within the Free Zone environment from the Free Zone Board as opposed to an earlier decision to run a Micro Finance Business. Management has been at a crossroads on the decision to make.

Required:
As a Tax Consultant, the Management of Pearl House Ltd has approached you to join them at a breakfast meeting and convince them on the tax benefits, if any, that Pearl House Ltd stands to gain from operating in the Free Zone environment. (10 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business operations, Corporate Taxation, Free Zone, Tax Benefits
Level: Level 3

Topic: Tax administration in Ghana
Series: NOV 2016

AT – Nov 2023 – L3 – Q2b – Tax planning

Assess the tax implications of the setup, location, and planned interventions for the establishment of Gigani Ltd.

Question

Some investors have invited you for comments on a business they intend to establish in four years’ time. Your comments are critical to the investors in making a choice on the establishment of one of the two entities, that is:

Manufacturing company or
Free zone company.

The investors intend to name the entity Gigani Ltd and establish it in Ghana. The following relates to the projected business of Gigani Ltd:

The shareholders plan to establish Gigani Ltd in either Accra/Tema, Ashanti Regional capital, or Kasoa in the Central Region. It is anticipated that irrespective of the location, Gigani Ltd would generate the same amount of profit in year 1 and grow by 5% each year, all things being equal.

Its first year’s financial performance is projected as follows:

Location	Profit (GH¢)
Accra/Tema	10,000,000
Ashanti Regional Capital	10,000,000
Kasoa, Central Region	10,000,000

Additional interventions on what the investors intend to do in the future when Gigani Ltd is established are as follows:

Establish the business with four resident shareholders.
Start with share capital of GH¢2 million from the contribution of the shareholders.
Raise a debt from two main sources: GH¢10 million from a financial institution in Ghana and GH¢20 million from shareholders with interest at 4% above the market rate.
Transfer an amount of GH¢2 million from retained earnings to share capital to increase the worth of the shareholders after the second year.
Recruit fresh graduates each year from the University of Ghana and Massachusetts Institute of Technology in Boston, USA for the next 5 years until it meets its staff requirement yet to be decided.

Required:
You are required to assess the tax implications of the: i) Set-up.
ii) Location.
iii) Interventions to be introduced.
(12 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business Setup, Corporate Tax, Free Zone, Location Incentives, Manufacturing, Tax implications
Level: Level 3

Topic: Tax planning
Series: NOV 2023

AT – April 2022 – L3 – Q2b – Tax planning

Explain how a Free Zone Enterprise can mitigate its tax liabilities and benefit shareholders.

Question

Required:
What mitigation measures will a Free Zone Enterprise adopt to reduce its tax liabilities and raise enough benefits to the shareholders?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Corporate Tax, Export, Free Zone, Tax Mitigation
Level: Level 3

Topic: Tax planning
Series: APR 2022

AT – Nov 2016 – L3 – Q4a – Tax administration in Ghana

Discuss the tax benefits that Pearl House Ltd stands to gain by operating in a Free Zone.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business operations, Corporate Taxation, Free Zone, Tax Benefits
Level: Level 3

Topic: Tax administration in Ghana
Series: NOV 2016

AT – Nov 2023 – L3 – Q2b – Tax planning

Assess the tax implications of the setup, location, and planned interventions for the establishment of Gigani Ltd.

Question

Manufacturing company or
Free zone company.

The investors intend to name the entity Gigani Ltd and establish it in Ghana. The following relates to the projected business of Gigani Ltd:

The shareholders plan to establish Gigani Ltd in either Accra/Tema, Ashanti Regional capital, or Kasoa in the Central Region. It is anticipated that irrespective of the location, Gigani Ltd would generate the same amount of profit in year 1 and grow by 5% each year, all things being equal.

Its first year’s financial performance is projected as follows:

Location	Profit (GH¢)
Accra/Tema	10,000,000
Ashanti Regional Capital	10,000,000
Kasoa, Central Region	10,000,000

Additional interventions on what the investors intend to do in the future when Gigani Ltd is established are as follows:

Establish the business with four resident shareholders.
Start with share capital of GH¢2 million from the contribution of the shareholders.
Raise a debt from two main sources: GH¢10 million from a financial institution in Ghana and GH¢20 million from shareholders with interest at 4% above the market rate.
Transfer an amount of GH¢2 million from retained earnings to share capital to increase the worth of the shareholders after the second year.
Recruit fresh graduates each year from the University of Ghana and Massachusetts Institute of Technology in Boston, USA for the next 5 years until it meets its staff requirement yet to be decided.

Required:
You are required to assess the tax implications of the: i) Set-up.
ii) Location.
iii) Interventions to be introduced.
(12 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business Setup, Corporate Tax, Free Zone, Location Incentives, Manufacturing, Tax implications
Level: Level 3

Topic: Tax planning
Series: NOV 2023

Question Tag: Free Zone

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

AT – April 2022 – L3 – Q2b – Tax planning

Explain how a Free Zone Enterprise can mitigate its tax liabilities and benefit shareholders.

AT – Nov 2016 – L3 – Q4a – Tax administration in Ghana

Discuss the tax benefits that Pearl House Ltd stands to gain by operating in a Free Zone.

AT – Nov 2023 – L3 – Q2b – Tax planning

Assess the tax implications of the setup, location, and planned interventions for the establishment of Gigani Ltd.

AT – April 2022 – L3 – Q2b – Tax planning

Explain how a Free Zone Enterprise can mitigate its tax liabilities and benefit shareholders.

AT – Nov 2016 – L3 – Q4a – Tax administration in Ghana

Discuss the tax benefits that Pearl House Ltd stands to gain by operating in a Free Zone.

AT – Nov 2023 – L3 – Q2b – Tax planning

Assess the tax implications of the setup, location, and planned interventions for the establishment of Gigani Ltd.

Our offerings

Contact Info

Customer

Get In Touch

Question Tag: Free Zone

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

AT – April 2022 – L3 – Q2b – Tax planning

Explain how a Free Zone Enterprise can mitigate its tax liabilities and benefit shareholders.

You're reporting an error for "AT – April 2022 – L3 – Q2b – Tax planning"

AT – Nov 2016 – L3 – Q4a – Tax administration in Ghana

Discuss the tax benefits that Pearl House Ltd stands to gain by operating in a Free Zone.

You're reporting an error for "AT – Nov 2016 – L3 – Q4a – Tax administration in Ghana"

AT – Nov 2023 – L3 – Q2b – Tax planning

Assess the tax implications of the setup, location, and planned interventions for the establishment of Gigani Ltd.

You're reporting an error for "AT – Nov 2023 – L3 – Q2b – Tax planning"

AT – April 2022 – L3 – Q2b – Tax planning

Explain how a Free Zone Enterprise can mitigate its tax liabilities and benefit shareholders.

You're reporting an error for "AT – April 2022 – L3 – Q2b – Tax planning"

AT – Nov 2016 – L3 – Q4a – Tax administration in Ghana

Discuss the tax benefits that Pearl House Ltd stands to gain by operating in a Free Zone.

You're reporting an error for "AT – Nov 2016 – L3 – Q4a – Tax administration in Ghana"

AT – Nov 2023 – L3 – Q2b – Tax planning

Assess the tax implications of the setup, location, and planned interventions for the establishment of Gigani Ltd.

You're reporting an error for "AT – Nov 2023 – L3 – Q2b – Tax planning"

Our offerings

Contact Info

Customer

Get In Touch

admin