- 20 Marks
ATP – Aug 2020 – L2 – Q2 – Income Tax Computation
Compute Mr Paa Kwesi Arthur’s tax liability for 2019, including salary and dividend income.
Question
Mr Paa Kwesi Arthur returned to Ghana after staying in the Netherlands for over 20 years and took up an appointment with Amanfro Limited as Investment Analyst effective 1st January 2019. His gross monthly basic salary for 2019 year of assessment was GH¢12,000.00. He contributed 5.5% and 10% of his monthly basic salary to Social Security and National Insurance Trust (SSNIT) and Goodwill Pension Trust respectively.
Mr Paa Kwesi Arthur, is a widow and all his children are schooling in the Netherlands. He is only responsible for the up keep of his biological parents, who are above seventy years of age.
Mr Paa Kwesi Arthur has investments in Germany, from which he earned a gross dividend of 12,000 Euros in 2019, from which 720 Euros was withheld as dividend tax and the balance remitted to him in Ghana. There is a Double Taxation Agreement between Ghana and Germany.
The rate of Exchange is GH¢6.2 to 1.00 Euro.
Required:
a) Compute the tax liability of Mr Paa Kwesi Arthur for 2019 Year of assessment.
b) Explain the basis of your computation.
Find Related Questions by Tags, levels, etc.
- Tags: Dividend tax, Double Taxation Agreement, Tax Basis
- Level: Level 2
- Topic: Income Tax Liabilities
- Series: AUGUST 2020
