Question Tag: Tax Jurisdiction

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IT – Feb 2020 – L1 – Q2 – Taxation of Non-Residents

Advise on tax implications and jurisdictions for Kazeebu's aircraft operations under Ghana-South Africa DTA

Question

Kazeebu is incorporated in South Africa. It is a newly registered aircraft operator. Directors of the company live in Ghana. They appoint agents who retail tickets on behalf of the company in Ghana. The tickets relate exclusively to three different categories of flight, all of which are within: South Africa, Ghana and United Kingdom.

Kazeebu also advertises the products of several suppliers of luxury goods in magazines which it supplies on its aircraft. It receives advertising fees from these suppliers.

South Africa determines corporate tax residence on the basis of the place of incorporation and place of central management and control.

The management of Kazeebu consulted Accor Consulting, a firm of Chartered Tax Practitioners to advise them on the tax implication of their activities. You are in the employment of Accor Consulting and your Managing Partner referred the issues to you.

Required
Prepare a memo to your Managing Partner in which you clearly
a. identify the tax implications of Kazeebu transactions, and
b. determine the jurisdictions to tax
(Answer within the context of Ghana/South Africa Double Taxation Agreement and Ghana Tax Laws)

Answer

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Tags: Aircraft Operations, Article 8, Double Taxation Agreement, Ghana, South Africa, Tax Jurisdiction
Level: Level 1

Topic: Double Taxation and Relief
Series: FEB 2020

IT – Aug 2020 – L1 – Q1 – Taxing Rights and Jurisdiction

Explain tax implications of Volta Airlines' activities under domestic law and DTA, focusing on UK incorporation and Ghana operations.

Question

Volta Airlines is incorporated in the United Kingdom (UK) and is a newly registered aircraft operator, operating for the past few months. United Kingdom determines corporate tax residence on the basis of the place of incorporation and place of central management and control.

Directors of Volta Airlines live in Ghana. They appoint agents who retail the airline’s tickets on behalf of the company in Ghana. The tickets relate exclusively to three different categories of flight, all of which are within the United Kingdom, South Africa and Ghana

The airline also agreed under an International Airlines Technical Pool agreement to provide spare parts and maintenance services to other airlines landing at the Ghana’s Kotoka International Airport. Volta Airlines receives maintenance fees from these services performed in Ghana.

Volta Airlines also advertises the products of several multinational companies in magazines which it supplies on its aircraft. It receives advertising fees from these companies.

Required:

a. Within the context of domestic tax law and the Double Tax Agreement explain the tax implication of activities of Volta Airlines.

b. Which country has the jurisdiction to tax the corporate income of airlines? Give reasons for your

Answer

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Tags: Ancillary Income, Double Taxation Agreement, International Traffic, Tax Jurisdiction
Level: Level 1

Topic: Double Taxation and Relief
Series: AUGUST 2020

ATAX – May 2017 – L3 – Q4b – International Taxation

Explain the term “Tax Havens”, factors for considering them, and list five countries that are tax havens.

Question

In the words of Benjamin Franklin, “the only things that are certain are death and taxes”. However, in some countries, taxes are not necessarily certain.

Required:
i. Explain briefly the term “Tax Havens”. (4 Marks)
ii. State THREE factors in considering whether a jurisdiction is a Tax Haven. (3 Marks)
iii. State FIVE countries that are Tax Havens. (5 Marks)

Answer

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Tags: International Taxation, Tax Havens, Tax Jurisdiction
Level: Level 3

Topic: International taxation

ATAX – May 2021 – L3 – Q4 – Taxation of Non-Resident Companies and Individuals

Circumstances under which non-resident companies are taxed in Nigeria and computation of Gen Power Incorporated's tax liabilities.

Question

“The concept of residence determines the extent to which the income of a taxpayer is liable to tax under a tax jurisdiction.”

Background:
Gen Power Incorporated, an international power plant company based in New York, USA, has subsidiary outlets in many parts of the world, including Kem Limited in Lagos, Nigeria. In 2018, Gen Power Incorporated was awarded a contract for US $3 million by the Nigerian government to construct a power plant. The project was executed by Kem Limited, and the following expenses were incurred:

Expense Description	Amount (₦’000)
Materials and other direct inputs	320,800
Hire of special equipment	31,500
Foreign experts cost and emoluments	65,300
Personnel costs	110,400
Administrative expenses	52,000
Depreciation of assets	60,700
Repairs and maintenance	7,200
Fuel and oil	8,200
Miscellaneous expenses	27,100

Other Relevant Information:

The exchange rate is ₦362 to US $1.
A similar special equipment could be hired for ₦25 million.
Administrative expenses include ₦12 million transferred to revenue reserve.
Breakdown of repairs and maintenance:

Repairs and Maintenance Breakdown	Amount (₦’000)
Maintenance of vehicles	2,000
Improvement to the office building	1,700
Repairs of equipment	2,100
Renewals of tools and implements	1,400
Total	7,200

Miscellaneous expenses include ₦4 million as loss on exchange for imported materials.
Capital allowances agreed with the tax authorities: ₦57 million.

Required:

a. Describe FIVE circumstances under which a non-resident company will be assessable to tax in Nigeria. (5 Marks)

b. Compute the tax liabilities of Gen Power Incorporated for the relevant year of assessment. (15 Marks)

Answer

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Tags: Contract Taxation, Non-Resident Companies, Tax Jurisdiction, Tax liabilities
Level: Level 3

Topic: Taxation of Non-Resident Companies and Individuals

ATAX – Nov 2016 – L3 – Q7 – Tax Planning and Management

Summarizes key points on tax planning, tax evasion, double taxation agreements, and non-tax factors for investment.

Question

As the Chairman of a Tax Summit in Ikeja, Lagos State, the discussion topics were:

Tax Planning, an Effective Method of Tax Avoidance
Tax Evasion in a Growing Economy
Double Taxation – The Provisions and the Impact
Jurisdiction for Investment – Non-Tax Factors

You are required to:

a) Explain briefly Tax Planning and Anti-Avoidance Legislations put in place by the Government. (3 Marks)
b) Summarize situations that may involve Tax Evasion. (4 Marks)
c) Explain Double Taxation Agreement – Provisions and the Main Objectives. (4 Marks)
d) Summarize Non-tax factors that attract investors in choosing a business jurisdiction. (4 Marks)

Answer

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Tags: Double Taxation Agreement, Investment Factors, Tax avoidance, Tax Evasion, Tax Jurisdiction
Level: Level 3

Topic: International taxation, Tax Planning and Management

TAX – May 2022 – L2 – SA – Q3 – Tax Administration and Enforcement

Identify the taxes and levies collectible by the Federal, State, and Local Governments in Nigeria, in light of a recent court ruling.

Question

The Federal Government of Nigeria expanded the taxes and levies which the tiers of government can impose through the Schedule to the Taxes and Levies (Approved List for Collection) Act (Amendment) Order, 2015. In this Order made by the Minister of Finance, several new tax/levy heads, such as infrastructure maintenance/development levy, wharf landing charge/fee, consumption tax, the National Information Technology Development levy, etc., were introduced.

However, on May 8, 2020, the Federal High Court sitting in Lagos, delivered judgment in suit number FHC/L/CS/1082/2019, between The Registered Trustees of Hotel Owners and Managers Association of Lagos (suing for itself and on behalf of all its members) vs The Attorney-General of the Federation and others. The court held that the Ministerial Order of 2015 is unconstitutional, null, and void.

The court submitted that the Constitution vests the legislature with the power to make laws. The court further stated that schedules to a law are part and parcel of the law and, as such, only the legislature can amend schedules to a law. The implication of this ruling is that all the taxes and levies that were added to those in the Taxes and Levies (Approved List for Collection) Act Cap. T2 LFN 2004, via the Ministerial Order 2015, are illegal and cannot be enforced.

Since the judgment, your firm has been faced with a series of inquiries from taxpayers on the taxes/levies they are now expected to pay.

Required:
a. State five (5) taxes collectible by the Federal Government.
b. State five (5) taxes/levies collectible by the State Governments.
c. State ten (10) taxes/levies collectible by the Local Governments.

Answer

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Tags: Federal Taxes, Local Government Levies, State Taxes, Tax Jurisdiction, Tax law
Level: Level 2

Topic: Tax Administration and Enforcement
Series: MAY 2022

IT – Feb 2020 – L1 – Q2 – Taxation of Non-Residents

Advise on tax implications and jurisdictions for Kazeebu's aircraft operations under Ghana-South Africa DTA

Question

Kazeebu also advertises the products of several suppliers of luxury goods in magazines which it supplies on its aircraft. It receives advertising fees from these suppliers.

South Africa determines corporate tax residence on the basis of the place of incorporation and place of central management and control.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Aircraft Operations, Article 8, Double Taxation Agreement, Ghana, South Africa, Tax Jurisdiction
Level: Level 1

Topic: Double Taxation and Relief
Series: FEB 2020

IT – Aug 2020 – L1 – Q1 – Taxing Rights and Jurisdiction

Explain tax implications of Volta Airlines' activities under domestic law and DTA, focusing on UK incorporation and Ghana operations.

Question

Volta Airlines also advertises the products of several multinational companies in magazines which it supplies on its aircraft. It receives advertising fees from these companies.

Required:

a. Within the context of domestic tax law and the Double Tax Agreement explain the tax implication of activities of Volta Airlines.

b. Which country has the jurisdiction to tax the corporate income of airlines? Give reasons for your

Answer

Find Related Questions by Tags, levels, etc.

Tags: Ancillary Income, Double Taxation Agreement, International Traffic, Tax Jurisdiction
Level: Level 1

Topic: Double Taxation and Relief
Series: AUGUST 2020

ATAX – May 2017 – L3 – Q4b – International Taxation

Explain the term “Tax Havens”, factors for considering them, and list five countries that are tax havens.

Question

In the words of Benjamin Franklin, “the only things that are certain are death and taxes”. However, in some countries, taxes are not necessarily certain.

Answer

Find Related Questions by Tags, levels, etc.

Tags: International Taxation, Tax Havens, Tax Jurisdiction
Level: Level 3

Topic: International taxation

ATAX – May 2021 – L3 – Q4 – Taxation of Non-Resident Companies and Individuals

Circumstances under which non-resident companies are taxed in Nigeria and computation of Gen Power Incorporated's tax liabilities.

Question

“The concept of residence determines the extent to which the income of a taxpayer is liable to tax under a tax jurisdiction.”

Expense Description	Amount (₦’000)
Materials and other direct inputs	320,800
Hire of special equipment	31,500
Foreign experts cost and emoluments	65,300
Personnel costs	110,400
Administrative expenses	52,000
Depreciation of assets	60,700
Repairs and maintenance	7,200
Fuel and oil	8,200
Miscellaneous expenses	27,100

Other Relevant Information:

The exchange rate is ₦362 to US $1.
A similar special equipment could be hired for ₦25 million.
Administrative expenses include ₦12 million transferred to revenue reserve.
Breakdown of repairs and maintenance:

Repairs and Maintenance Breakdown	Amount (₦’000)
Maintenance of vehicles	2,000
Improvement to the office building	1,700
Repairs of equipment	2,100
Renewals of tools and implements	1,400
Total	7,200

Miscellaneous expenses include ₦4 million as loss on exchange for imported materials.
Capital allowances agreed with the tax authorities: ₦57 million.

Required:

a. Describe FIVE circumstances under which a non-resident company will be assessable to tax in Nigeria. (5 Marks)

b. Compute the tax liabilities of Gen Power Incorporated for the relevant year of assessment. (15 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Contract Taxation, Non-Resident Companies, Tax Jurisdiction, Tax liabilities
Level: Level 3

Topic: Taxation of Non-Resident Companies and Individuals

ATAX – Nov 2016 – L3 – Q7 – Tax Planning and Management

Summarizes key points on tax planning, tax evasion, double taxation agreements, and non-tax factors for investment.

Question

As the Chairman of a Tax Summit in Ikeja, Lagos State, the discussion topics were:

Tax Planning, an Effective Method of Tax Avoidance
Tax Evasion in a Growing Economy
Double Taxation – The Provisions and the Impact
Jurisdiction for Investment – Non-Tax Factors

You are required to:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Double Taxation Agreement, Investment Factors, Tax avoidance, Tax Evasion, Tax Jurisdiction
Level: Level 3

Topic: International taxation, Tax Planning and Management

TAX – May 2022 – L2 – SA – Q3 – Tax Administration and Enforcement

Identify the taxes and levies collectible by the Federal, State, and Local Governments in Nigeria, in light of a recent court ruling.

Question

Since the judgment, your firm has been faced with a series of inquiries from taxpayers on the taxes/levies they are now expected to pay.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Federal Taxes, Local Government Levies, State Taxes, Tax Jurisdiction, Tax law
Level: Level 2

Topic: Tax Administration and Enforcement
Series: MAY 2022

Question Tag: Tax Jurisdiction

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IT – Feb 2020 – L1 – Q2 – Taxation of Non-Residents

Advise on tax implications and jurisdictions for Kazeebu's aircraft operations under Ghana-South Africa DTA

IT – Aug 2020 – L1 – Q1 – Taxing Rights and Jurisdiction

Explain tax implications of Volta Airlines' activities under domestic law and DTA, focusing on UK incorporation and Ghana operations.

ATAX – May 2017 – L3 – Q4b – International Taxation

Explain the term “Tax Havens”, factors for considering them, and list five countries that are tax havens.

ATAX – May 2021 – L3 – Q4 – Taxation of Non-Resident Companies and Individuals

Circumstances under which non-resident companies are taxed in Nigeria and computation of Gen Power Incorporated's tax liabilities.

ATAX – Nov 2016 – L3 – Q7 – Tax Planning and Management

Summarizes key points on tax planning, tax evasion, double taxation agreements, and non-tax factors for investment.

TAX – May 2022 – L2 – SA – Q3 – Tax Administration and Enforcement

Identify the taxes and levies collectible by the Federal, State, and Local Governments in Nigeria, in light of a recent court ruling.

IT – Feb 2020 – L1 – Q2 – Taxation of Non-Residents

Advise on tax implications and jurisdictions for Kazeebu's aircraft operations under Ghana-South Africa DTA

IT – Aug 2020 – L1 – Q1 – Taxing Rights and Jurisdiction

Explain tax implications of Volta Airlines' activities under domestic law and DTA, focusing on UK incorporation and Ghana operations.

ATAX – May 2017 – L3 – Q4b – International Taxation

Explain the term “Tax Havens”, factors for considering them, and list five countries that are tax havens.

ATAX – May 2021 – L3 – Q4 – Taxation of Non-Resident Companies and Individuals

Circumstances under which non-resident companies are taxed in Nigeria and computation of Gen Power Incorporated's tax liabilities.

ATAX – Nov 2016 – L3 – Q7 – Tax Planning and Management

Summarizes key points on tax planning, tax evasion, double taxation agreements, and non-tax factors for investment.

TAX – May 2022 – L2 – SA – Q3 – Tax Administration and Enforcement

Identify the taxes and levies collectible by the Federal, State, and Local Governments in Nigeria, in light of a recent court ruling.

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Question Tag: Tax Jurisdiction

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IT – Feb 2020 – L1 – Q2 – Taxation of Non-Residents

Advise on tax implications and jurisdictions for Kazeebu's aircraft operations under Ghana-South Africa DTA

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IT – Aug 2020 – L1 – Q1 – Taxing Rights and Jurisdiction

Explain tax implications of Volta Airlines' activities under domestic law and DTA, focusing on UK incorporation and Ghana operations.

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ATAX – May 2017 – L3 – Q4b – International Taxation

Explain the term “Tax Havens”, factors for considering them, and list five countries that are tax havens.

You're reporting an error for "ATAX – May 2017 – L3 – Q4b – International Taxation"

ATAX – May 2021 – L3 – Q4 – Taxation of Non-Resident Companies and Individuals

Circumstances under which non-resident companies are taxed in Nigeria and computation of Gen Power Incorporated's tax liabilities.

You're reporting an error for "ATAX – May 2021 – L3 – Q4 – Taxation of Non-Resident Companies and Individuals"

ATAX – Nov 2016 – L3 – Q7 – Tax Planning and Management

Summarizes key points on tax planning, tax evasion, double taxation agreements, and non-tax factors for investment.

You're reporting an error for "ATAX – Nov 2016 – L3 – Q7 – Tax Planning and Management"

TAX – May 2022 – L2 – SA – Q3 – Tax Administration and Enforcement

Identify the taxes and levies collectible by the Federal, State, and Local Governments in Nigeria, in light of a recent court ruling.

You're reporting an error for "TAX – May 2022 – L2 – SA – Q3 – Tax Administration and Enforcement"

IT – Feb 2020 – L1 – Q2 – Taxation of Non-Residents

Advise on tax implications and jurisdictions for Kazeebu's aircraft operations under Ghana-South Africa DTA

You're reporting an error for "IT – Feb 2020 – L1 – Q2 – Taxation of Non-Residents"

IT – Aug 2020 – L1 – Q1 – Taxing Rights and Jurisdiction

Explain tax implications of Volta Airlines' activities under domestic law and DTA, focusing on UK incorporation and Ghana operations.

You're reporting an error for "IT – Aug 2020 – L1 – Q1 – Taxing Rights and Jurisdiction"

ATAX – May 2017 – L3 – Q4b – International Taxation

Explain the term “Tax Havens”, factors for considering them, and list five countries that are tax havens.

You're reporting an error for "ATAX – May 2017 – L3 – Q4b – International Taxation"

ATAX – May 2021 – L3 – Q4 – Taxation of Non-Resident Companies and Individuals

Circumstances under which non-resident companies are taxed in Nigeria and computation of Gen Power Incorporated's tax liabilities.

You're reporting an error for "ATAX – May 2021 – L3 – Q4 – Taxation of Non-Resident Companies and Individuals"

ATAX – Nov 2016 – L3 – Q7 – Tax Planning and Management

Summarizes key points on tax planning, tax evasion, double taxation agreements, and non-tax factors for investment.

You're reporting an error for "ATAX – Nov 2016 – L3 – Q7 – Tax Planning and Management"

TAX – May 2022 – L2 – SA – Q3 – Tax Administration and Enforcement

Identify the taxes and levies collectible by the Federal, State, and Local Governments in Nigeria, in light of a recent court ruling.

You're reporting an error for "TAX – May 2022 – L2 – SA – Q3 – Tax Administration and Enforcement"

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