Tax Credit – Knowsia

AT – Nov 2017 – L3 – Q3 – Double Taxation Reliefs and Credits

Outline objectives of the MOU with oil companies and compute double tax credit for Salim Consultants.

Question

a. Outline FIVE objectives of the Memorandum of Understanding which the Federal Government of Nigeria entered into with the Oil Producing Companies on January 1, 1986.

b. SALIM CONSULTANTS LIMITED, incorporated in 2012, is a corporate advisory firm in Nigeria. In 2015, it expanded to Burundi to explore business opportunities there. The directors are interested in the Double Taxation Agreement but have not benefited from it before.

Below is a summary of the Income Statements for the year ended December 31, 2016:

Description	Nigeria (N)	Burundi (N)	Total (N)
Gross Advisory fees	57,000,000	21,750,000	78,750,000
Other Income	960,000	1,800,000	2,760,000
Total	57,960,000	23,550,000	81,510,000
Deduct Expenses:
Deal Execution Expenses	(30,225,000)	(9,750,000)	(39,975,000)
Office Rent	(1,800,000)	(675,000)	(2,475,000)
Depreciation	(5,100,000)	(2,700,000)	(7,800,000)
Loss on sale of Non-Current Assets	–	(525,000)	(525,000)
Foreign Exchange Loss Provision	(960,000)	–	(960,000)
Other Operating Expenses	(3,240,000)	(1,380,000)	(4,620,000)
Net Operating Profit	16,635,000	8,520,000	25,155,000

Additional information:
(i) N2,130,000 was paid to the Burundi Tax Authority after claiming N4,800,000 Capital Allowance. Capital Allowance claimable in Nigeria was N7,800,000.
(ii) Other income of N960,000 is profit from the sale of Non-Current Assets, while N1,800,000 is gains from the disposal of securities.

Required:
a. Explain briefly what is meant by Double Taxation Relief.
b. Compute the Double Tax Credit claimable by the Company assuming there is a Double Taxation Agreement with Burundi.

Answer

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Tags: Double Taxation, Memorandum of Understanding, Tax computation, Tax Credit
Level: Level 3

Topic: Double Taxation Reliefs and Credits
Series: NOV 2017

AT – May 2021 – L3 – Q2d – International Taxation

Compute the tax payable for Ganigani Ltd considering foreign income and relinquished tax credit.

Question

Ganigani Ltd is a company based in Ghana and has a business dealing mainly in Nigeria. In the 2020 year of assessment, the following data is relevant to parts of its operation:

Global income: GH¢25,000,000
Tax paid in Nigeria: ₦1,000,000
Exchange rate: GH¢1 = ₦67.59

Ganigani Ltd elects to relinquish a foreign tax credit for the year in line with section 112 of the Income Tax Act, 2015 (Act 896) as amended.

Required:
Compute the tax payable.

Answer

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Tags: Corporate Tax, Foreign income, Tax Credit
Level: Level 3

Topic: International taxation
Series: MAY 2021

AT – Aug 2022 – L3 – Q5b – Tax Planning

Advise Wina Ltd on the tax implications of acquiring shares and providing a financial facility to Fatia Ltd in Ghana.

Question

Wina Ltd (Wina) is a company incorporated in the United States of America and also resident
in the United States of America. The Company has been looking for opportunities across Africa
to invest its idle funds in support of shareholders’ decision.
In the latter part of 2021, the management of Wina identified Ghana as a country with huge
potentials for foreign investments. Wina intends to acquire 60% shares in Fatia Ltd (Fatia), a
company resident in Ghana with indigenous ownership but with unimpressive financial
records.When the deal is approved, it would provide a financial facility, the equivalent of
GH¢10,000,000 as a loan with interest at the rate of 22.5% comparable to all other interest
rates.
The equity of Fatia amounts to GH¢500,000 comprising Stated Capital of GH¢250,000,
Retained Earnings of GH¢200,000 and Revaluation Reserves of GH¢50,000.
Required:
Using the format of a memo:
Advise the management of Wina as a final level candidate on the tax implications of this
investment and the credit support that Wina can give without any restriction from the Ghana
Revenue Authority.

Answer

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Tags: Debt-equity ratio, Tax Credit, Thin Capitalization, Withholding Tax
Level: Level 3

Topic: Tax planning
Series: AUG 2022

AT – May 2016 – L3 – Q5a – International taxation

Calculate tax credit relief available for a resident with income from the UK under a double taxation agreement.

Question

Mrs. Olivia Quartey is a resident in Ghana and works as the Finance Director of Ghana Trustees Limited. She earned a gross salary of GH¢30,000.00 for the 2014 year of assessment. She contributed 5.5% of her salary to the social security fund. In 2014, the gross royalties that accrued to her was £4,000 from the United Kingdom from which tax of £800 had been deducted with the remainder of £3,200 being remitted to her in Ghana.

Granted that Ghana has a double taxation agreement with the United Kingdom, you are required to calculate the tax credit relief (if any) available to Mrs. Olivia Quartey for the year 2014.
[Exchange rate: GH¢4.50 = £1.] (16 marks)

Tax Rate Table

Income (GH¢)	Rate (%)
First 1,584.00	Free
Next 792.00	5
Next 1,104.00	10
Next 28,200.00	17.5
Exceeding 31,680.00	25

Answer

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Tags: Double Taxation, Exchange Rate, Ghana, Tax Credit, UK
Level: Level 3

Topic: International taxation
Series: MAY 2016

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

Explains the circumstances under which a taxable person can claim VAT refund or credit.

Question

Under what circumstances will a taxable person be entitled to a tax refund or tax credit where the amount of input tax which is deductible exceeds the amount of output tax due in respect of the tax period. (10 marks)

Answer

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Tags: Input Tax, Output Tax, Refund, Tax Credit, VAT
Level: Level 3

Topic: Tax administration in Ghana
Series: MAY 2016

AT – Nov 2017 – L3 – Q3 – Double Taxation Reliefs and Credits

Outline objectives of the MOU with oil companies and compute double tax credit for Salim Consultants.

Question

a. Outline FIVE objectives of the Memorandum of Understanding which the Federal Government of Nigeria entered into with the Oil Producing Companies on January 1, 1986.

Below is a summary of the Income Statements for the year ended December 31, 2016:

Description	Nigeria (N)	Burundi (N)	Total (N)
Gross Advisory fees	57,000,000	21,750,000	78,750,000
Other Income	960,000	1,800,000	2,760,000
Total	57,960,000	23,550,000	81,510,000
Deduct Expenses:
Deal Execution Expenses	(30,225,000)	(9,750,000)	(39,975,000)
Office Rent	(1,800,000)	(675,000)	(2,475,000)
Depreciation	(5,100,000)	(2,700,000)	(7,800,000)
Loss on sale of Non-Current Assets	–	(525,000)	(525,000)
Foreign Exchange Loss Provision	(960,000)	–	(960,000)
Other Operating Expenses	(3,240,000)	(1,380,000)	(4,620,000)
Net Operating Profit	16,635,000	8,520,000	25,155,000

Required:
a. Explain briefly what is meant by Double Taxation Relief.
b. Compute the Double Tax Credit claimable by the Company assuming there is a Double Taxation Agreement with Burundi.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Double Taxation, Memorandum of Understanding, Tax computation, Tax Credit
Level: Level 3

Topic: Double Taxation Reliefs and Credits
Series: NOV 2017

AT – May 2021 – L3 – Q2d – International Taxation

Compute the tax payable for Ganigani Ltd considering foreign income and relinquished tax credit.

Question

Ganigani Ltd is a company based in Ghana and has a business dealing mainly in Nigeria. In the 2020 year of assessment, the following data is relevant to parts of its operation:

Global income: GH¢25,000,000
Tax paid in Nigeria: ₦1,000,000
Exchange rate: GH¢1 = ₦67.59

Ganigani Ltd elects to relinquish a foreign tax credit for the year in line with section 112 of the Income Tax Act, 2015 (Act 896) as amended.

Required:
Compute the tax payable.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Corporate Tax, Foreign income, Tax Credit
Level: Level 3

Topic: International taxation
Series: MAY 2021

AT – Aug 2022 – L3 – Q5b – Tax Planning

Advise Wina Ltd on the tax implications of acquiring shares and providing a financial facility to Fatia Ltd in Ghana.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Debt-equity ratio, Tax Credit, Thin Capitalization, Withholding Tax
Level: Level 3

Topic: Tax planning
Series: AUG 2022

AT – May 2016 – L3 – Q5a – International taxation

Calculate tax credit relief available for a resident with income from the UK under a double taxation agreement.

Question

Tax Rate Table

Income (GH¢)	Rate (%)
First 1,584.00	Free
Next 792.00	5
Next 1,104.00	10
Next 28,200.00	17.5
Exceeding 31,680.00	25

Answer

Find Related Questions by Tags, levels, etc.

Tags: Double Taxation, Exchange Rate, Ghana, Tax Credit, UK
Level: Level 3

Topic: International taxation
Series: MAY 2016

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

Explains the circumstances under which a taxable person can claim VAT refund or credit.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Input Tax, Output Tax, Refund, Tax Credit, VAT
Level: Level 3

Topic: Tax administration in Ghana
Series: MAY 2016

Question Tag: Tax Credit

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AT – Nov 2017 – L3 – Q3 – Double Taxation Reliefs and Credits

Outline objectives of the MOU with oil companies and compute double tax credit for Salim Consultants.

AT – May 2021 – L3 – Q2d – International Taxation

Compute the tax payable for Ganigani Ltd considering foreign income and relinquished tax credit.

AT – Aug 2022 – L3 – Q5b – Tax Planning

Advise Wina Ltd on the tax implications of acquiring shares and providing a financial facility to Fatia Ltd in Ghana.

AT – May 2016 – L3 – Q5a – International taxation

Calculate tax credit relief available for a resident with income from the UK under a double taxation agreement.

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

Explains the circumstances under which a taxable person can claim VAT refund or credit.

AT – Nov 2017 – L3 – Q3 – Double Taxation Reliefs and Credits

Outline objectives of the MOU with oil companies and compute double tax credit for Salim Consultants.

AT – May 2021 – L3 – Q2d – International Taxation

Compute the tax payable for Ganigani Ltd considering foreign income and relinquished tax credit.

AT – Aug 2022 – L3 – Q5b – Tax Planning

Advise Wina Ltd on the tax implications of acquiring shares and providing a financial facility to Fatia Ltd in Ghana.

AT – May 2016 – L3 – Q5a – International taxation

Calculate tax credit relief available for a resident with income from the UK under a double taxation agreement.

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

Explains the circumstances under which a taxable person can claim VAT refund or credit.

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AT – Nov 2017 – L3 – Q3 – Double Taxation Reliefs and Credits

Outline objectives of the MOU with oil companies and compute double tax credit for Salim Consultants.

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AT – May 2021 – L3 – Q2d – International Taxation

Compute the tax payable for Ganigani Ltd considering foreign income and relinquished tax credit.

You're reporting an error for "AT – May 2021 – L3 – Q2d – International Taxation"

AT – Aug 2022 – L3 – Q5b – Tax Planning

Advise Wina Ltd on the tax implications of acquiring shares and providing a financial facility to Fatia Ltd in Ghana.

You're reporting an error for "AT – Aug 2022 – L3 – Q5b – Tax Planning"

AT – May 2016 – L3 – Q5a – International taxation

Calculate tax credit relief available for a resident with income from the UK under a double taxation agreement.

You're reporting an error for "AT – May 2016 – L3 – Q5a – International taxation"

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

Explains the circumstances under which a taxable person can claim VAT refund or credit.

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

AT – Nov 2017 – L3 – Q3 – Double Taxation Reliefs and Credits

Outline objectives of the MOU with oil companies and compute double tax credit for Salim Consultants.

You're reporting an error for "AT – Nov 2017 – L3 – Q3 – Double Taxation Reliefs and Credits"

AT – May 2021 – L3 – Q2d – International Taxation

Compute the tax payable for Ganigani Ltd considering foreign income and relinquished tax credit.

You're reporting an error for "AT – May 2021 – L3 – Q2d – International Taxation"

AT – Aug 2022 – L3 – Q5b – Tax Planning

Advise Wina Ltd on the tax implications of acquiring shares and providing a financial facility to Fatia Ltd in Ghana.

You're reporting an error for "AT – Aug 2022 – L3 – Q5b – Tax Planning"

AT – May 2016 – L3 – Q5a – International taxation

Calculate tax credit relief available for a resident with income from the UK under a double taxation agreement.

You're reporting an error for "AT – May 2016 – L3 – Q5a – International taxation"

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

Explains the circumstances under which a taxable person can claim VAT refund or credit.

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

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