Question Tag: Tax Planning

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STP – Feb 2020 – L2 – Q5 – Anti-Avoidance Provisions

Identify and discuss three anti-avoidance provisions in the Income Tax Act, 2015 (Act 896) and their limitations on tax planning.

Question

Although tax planners have the liberty to devise schemes which reduce the tax liability of their clients, the Income Tax Act, 2015 (Act 896) contains provisions which limit tax planning schemes.

Required:
Identify any three (3) anti-avoidance provisions in Act 896 and discuss how each of these provisions places a limitation on the ability of a person to engage in tax planning.

Answer

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Tags: Accounting Year, Anti-Avoidance, Arm's Length, General Anti-Avoidance Rule, Income Splitting, Income Tax Act, Indirect Payments, Tax Planning, Thin Capitalization
Level: Level 2

Topic: Taxation and Operating Strategies in Business
Series: FEB 2020

STP – Feb 2020 – L2 – Q4 – Business Entity Tax Implications

Advise on tax implications of establishing a company, partnership, or sole proprietorship and identify which offers the least tax exposure for an investor.

Question

As a renowned tax consultant, a potential investor in the real estate sector in Ghana is seeking your expert opinion on the tax implications of establishing a company, a partnership or a sole proprietorship and which form of the business organisations gives the least tax exposure for an investor.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business Entities, Company, Corporate Tax, Income Tax, Partnership, Sole Proprietorship, Tax Exposure, Tax implications, Tax Planning, Withholding Tax
Level: Level 2

Topic: Tax Strategies for New Business Formation
Series: FEB 2020

STP – Aug 2020 – L2 – Q3 – Ownership Change Tax Implications

Discuss income tax implications for Obibini Ghana Limited if an investor acquires 51% of its shares.

Question

Obibini Ghana Limited is a wholly owned Ghanaian real estate company. The basis period of the company ends on 31st December each year. In order to raise additional capital to expand its activities, the company is looking for an investor who would acquire at least 51% of the shares of the company. The managers of the company are engaged in negotiations with a potential investor and the parties expect the transaction to be completed on 31st January 2020. The financial statements of the company revealed that the company made a loss of GH₵2,500,000 for the period ended 31st December 2019. The company also had financial cost of GH₵100,000.00
The company also has a parcel of land located at Abokobi which the company purchased three years ago at the cost of GH₵100,000.00. The current value of the land is GH₵500,000.00

Required
The managers of the Obibini Ghana are seeking your opinion on the following:
i. the income tax implications for the company if an investor acquires 51% of the company’s shares.

ii. The tax planning opportunities available which could reduce the income tax exposure of company if an investor acquires 51% of the company’s shares.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Income Tax Act, Ownership Change, Share Acquisition, Tax Mitigation, Tax Planning
Level: Level 2

Topic: Foundations of Strategic Tax Planning
Series: AUGUST 2020

STP – Aug 2020 – L2 – Q2 – Corporate Restructuring

Restructure Mr. Kofi Opoku’s companies to reduce tax exposure and provide cheaper financing for Speed Transport Ghana Limited.

Question

Mr. Kofi Opoku is the direct shareholder of Unique Farms Ghana Limited and Speed Transport Ghana Limited. Unique Farms is engaged in tree crop farming and the company harvested the tree crops for the first time in 2019. In April, 2020, he received a copy of the audited financial statements of the two companies.
An analysis of the audited financial statements of the companies revealed the Unique Farms Ghana Limited is more profitable of the two companies. Speed Transport Ghana Limited however requires a lot of money for its operating activities and it mostly resorts to borrowing from financial institutions to meet its expenditure requirements. The high borrowing costs was affecting the profitability of the company.
Mr. Opoku also noticed that tax exposure on his investments is not ideal. Mr. Kofi Opoku has been informed that you are an expert in strategic tax planning.

Required
You are required to help Mr. Kofi Opoku restructure his companies in a manner that would provide a cheaper financing option for Speed Transport Ghana Limited and reduce his overall tax exposure on the investments.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Concessionary Tax Rates, Corporate Restructuring, Dividend taxation, Income Tax Act, Share Swap, Subsidiary Structure, Tax Planning
Level: Level 2

Topic: Tax Strategies for New Business Formation
Series: AUGUST 2020

STP – Aug 2020 – L2 – Q1 – Tax Planning vs. Tax Avoidance

Discuss distinction between tax planning and tax avoidance under Ghanaian tax law with examples and references.

Question

The Council of the Chartered Institute of Taxation, Ghana (CITG) has invited you to speak at a Continuous Development Program (CPD) on the topic “The distinction between tax planning schemes and tax avoidance arrangements under Ghanaian tax laws”.
In the letter of invitation, the Council indicated that you are to submit a detailed write-up of your presentation.

Required
With the aid of appropriate examples and specific references to Ghanaian tax law provisions, write in sufficient detail, the content of your presentation.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Ghanaian Tax Law, Income Splitting, Income Tax Act, Revenue Administration Act, Tax avoidance, Tax Exemptions, Tax Planning, Thin Capitalization, Transfer Pricing
Level: Level 2

Topic: Foundations of Strategic Tax Planning
Series: AUGUST 2020

STP – Aug 2018 – L2 – Q1 – Taxation of Capital Transactions

Advise Welmount Ghana Ltd on tax implications of selling land and shares, and measures to mitigate tax exposure.

Question

Welmount Ghana Ltd is a construction company with its registered office located at Cantoments in Accra. In February 2007 it purchased a parcel of land at Achimota at the cost of GH₵75,000. The company spent GH₵25,000 to construct a fence wall around the property and to complete title registration processes at the Lands Commission. In March 2008, the company also purchased shares in Barclays bank of Ghana for GH₵20,000. In April 2017, the board of directors of the company decided to purchase another parcel of land at Tse Addo near the Trade Fair at La. The board further resolved to sell off the parcel of land purchased in February 2007 and the shares the company held in Barclays bank to finance the purchase of the parcel of land at Tse Addo. The company engaged the services of a valuer to determine the market value of the land located at Achimota and the shares the company held in Barclays bank. The company paid the valuer GH₵30,000 for his services. A marketing firm was contracted to advertise the sale of the parcel of land and the shares and the firm submitted a bill of GH₵35,000 to the company. In June 2017, the company sold the parcel of land and the shares in a single transaction for GH₵500,000. At the time of the sale, the market value of the parcel of land was GH₵400,000 and that of the shares was GH₵100,000. The company paid GH₵40,000 to a law firm to conduct due diligence on the parcel of land the company intended to purchase. In February 2018, the Managing Director of the company signed the purchase agreement and an amount of GH₵600,000 was paid to the owners of the property.

Required:

I. Advise on the company on the income tax implications of the realization of the assets. (20 marks) II. Advise on measures the company could have adopted to mitigate its tax exposure (if any) on the realization of the assets.

Answer

Find Related Questions by Tags, levels, etc.

Tags: apportionment, Asset Realization, Capital Gains, Income Tax Act, Roll-Over Relief, Tax Planning
Level: Level 2

Topic: Taxation of Capital Transactions
Series: AUG 2018

STP – Feb 2021 – L2 – Q5 – Non-tax Factors for Investment Location

State and explain three non-tax factors influencing the choice of investment location.

Question

a) State and explain three (3) non-tax factors which may inform the choice of a particular location for an investment.

b) Discuss three (3) tax incentives available to investors who register under the Free Zone Act, 1995 (Act 504).

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business Decisions, Investment location, Non-Tax Factors, Tax Planning
Level: Level 2

Topic: Foundations of Strategic Tax Planning
Series: FEBRUARY 2021

STP – Feb 2021 – L2 – Q4 – Taxation and Operating Strategies

Explain three anti-avoidance provisions in Ghana's Income Tax laws and their impact on tax planning.

Question

State and explain three (3) anti-avoidance provisions found in the Income Tax laws of Ghana and how these provisions place a limitation on the tax planning opportunities available to taxpayers.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Anti-Avoidance, Arm's Length, Income Splitting, Income Tax, Tax Planning, Thin Capitalization
Level: Level 2

Topic: Taxation and Operating Strategies in Business
Series: FEBRUARY 2021

STP – Feb 2021 – L2 – Q3 – Taxation of Capital Transactions

Advise Tremor Ghana Ltd on tax implications of asset disposals and tax planning opportunities.

Question

Tremor Ghana Ltd is a trading company with its registered office located at North Legon. The basis period of the company ends on $31^{\text {st }}$ December of every year. In August 2018, the company acquired the following assets.

ASSET	COST (GHc)
Computers	$50,000.00$
Motor Vehicles	$150,000.00$
Land	$350,000.00$

In November 2019, the company disposed of the assets for the following amounts:

ASSET	COST (GHc)
Computers	$70,000.00$
Motor Vehicles	$160,000.00$
Land	$450,000.00$

In January 2020, the company acquired a new office building at the cost of GHc600,000.

Required: (i) Advise the company on the income tax implications of the realization of the assets in November 2019. 20 marks (ii) Identify the tax planning opportunities the company could have employed to mitigate its tax exposure on the realization of the assets.

Answer

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Topic: Taxation of Capital Transactions
Series: FEBRUARY 2021

STP – Feb 2021 – L2 – Q1 – Strategic Tax Planning

Advise on tax implications of AIG acquiring 55% stake in Fluid Logistics Ghana and providing a GH₵6.5M loan, plus tax planning options.

Question

The President of America Is Great (AIG) Group, a US Corporation, is exploring the possibility of acquiring a fifty-five percent stake in Fluid Logistics Ghana Limited. The stated capital of Fluid Logistics Ghana Limited is GH₵1,500,000. AIG Corporation intends providing a loan of GH₵6,500,000 to Fluid Logistics Ghana Limited when the transaction for the acquisition of the fifty-five percent stake is completed. The President of AIG Corporation is seeking your advice on the tax implications of the proposed transactions.

Required: Advise the President on: i. The income tax implications of the acquisition of a fifty-five percent stake in Fluid Logistics Ghana Limited. 9 marks ii. The income tax implications of providing the loan of GH₵6,500,000. 9 marks iii. The tax planning options available to minimize the tax effects of the proposed transactions.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Acquisition, Arm's Length, Corporate Tax, Debt-to-Equity Ratio, Ghana tax law, Income Tax, Loan, Tax implications, Tax Planning, Thin Capitalization
Level: Level 2

Topic: Tax Strategies for Business Growth and Expansion, Taxation of Capital Transactions
Series: FEBRUARY 2021

STP – Feb 2020 – L2 – Q5 – Anti-Avoidance Provisions

Identify and discuss three anti-avoidance provisions in the Income Tax Act, 2015 (Act 896) and their limitations on tax planning.

Question

Although tax planners have the liberty to devise schemes which reduce the tax liability of their clients, the Income Tax Act, 2015 (Act 896) contains provisions which limit tax planning schemes.

Required:
Identify any three (3) anti-avoidance provisions in Act 896 and discuss how each of these provisions places a limitation on the ability of a person to engage in tax planning.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accounting Year, Anti-Avoidance, Arm's Length, General Anti-Avoidance Rule, Income Splitting, Income Tax Act, Indirect Payments, Tax Planning, Thin Capitalization
Level: Level 2

Topic: Taxation and Operating Strategies in Business
Series: FEB 2020

STP – Feb 2020 – L2 – Q4 – Business Entity Tax Implications

Advise on tax implications of establishing a company, partnership, or sole proprietorship and identify which offers the least tax exposure for an investor.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business Entities, Company, Corporate Tax, Income Tax, Partnership, Sole Proprietorship, Tax Exposure, Tax implications, Tax Planning, Withholding Tax
Level: Level 2

Topic: Tax Strategies for New Business Formation
Series: FEB 2020

STP – Aug 2020 – L2 – Q3 – Ownership Change Tax Implications

Discuss income tax implications for Obibini Ghana Limited if an investor acquires 51% of its shares.

Question

Required
The managers of the Obibini Ghana are seeking your opinion on the following:
i. the income tax implications for the company if an investor acquires 51% of the company’s shares.

ii. The tax planning opportunities available which could reduce the income tax exposure of company if an investor acquires 51% of the company’s shares.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Income Tax Act, Ownership Change, Share Acquisition, Tax Mitigation, Tax Planning
Level: Level 2

Topic: Foundations of Strategic Tax Planning
Series: AUGUST 2020

STP – Aug 2020 – L2 – Q2 – Corporate Restructuring

Restructure Mr. Kofi Opoku’s companies to reduce tax exposure and provide cheaper financing for Speed Transport Ghana Limited.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Concessionary Tax Rates, Corporate Restructuring, Dividend taxation, Income Tax Act, Share Swap, Subsidiary Structure, Tax Planning
Level: Level 2

Topic: Tax Strategies for New Business Formation
Series: AUGUST 2020

STP – Aug 2020 – L2 – Q1 – Tax Planning vs. Tax Avoidance

Discuss distinction between tax planning and tax avoidance under Ghanaian tax law with examples and references.

Question

Required
With the aid of appropriate examples and specific references to Ghanaian tax law provisions, write in sufficient detail, the content of your presentation.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Ghanaian Tax Law, Income Splitting, Income Tax Act, Revenue Administration Act, Tax avoidance, Tax Exemptions, Tax Planning, Thin Capitalization, Transfer Pricing
Level: Level 2

Topic: Foundations of Strategic Tax Planning
Series: AUGUST 2020

STP – Aug 2018 – L2 – Q1 – Taxation of Capital Transactions

Advise Welmount Ghana Ltd on tax implications of selling land and shares, and measures to mitigate tax exposure.

Question

Required:

Answer

Find Related Questions by Tags, levels, etc.

Tags: apportionment, Asset Realization, Capital Gains, Income Tax Act, Roll-Over Relief, Tax Planning
Level: Level 2

Topic: Taxation of Capital Transactions
Series: AUG 2018

STP – Feb 2021 – L2 – Q5 – Non-tax Factors for Investment Location

State and explain three non-tax factors influencing the choice of investment location.

Question

a) State and explain three (3) non-tax factors which may inform the choice of a particular location for an investment.

b) Discuss three (3) tax incentives available to investors who register under the Free Zone Act, 1995 (Act 504).

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business Decisions, Investment location, Non-Tax Factors, Tax Planning
Level: Level 2

Topic: Foundations of Strategic Tax Planning
Series: FEBRUARY 2021

STP – Feb 2021 – L2 – Q4 – Taxation and Operating Strategies

Explain three anti-avoidance provisions in Ghana's Income Tax laws and their impact on tax planning.

Question

State and explain three (3) anti-avoidance provisions found in the Income Tax laws of Ghana and how these provisions place a limitation on the tax planning opportunities available to taxpayers.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Anti-Avoidance, Arm's Length, Income Splitting, Income Tax, Tax Planning, Thin Capitalization
Level: Level 2

Topic: Taxation and Operating Strategies in Business
Series: FEBRUARY 2021

STP – Feb 2021 – L2 – Q3 – Taxation of Capital Transactions

Advise Tremor Ghana Ltd on tax implications of asset disposals and tax planning opportunities.

Question

ASSET	COST (GHc)
Computers	$50,000.00$
Motor Vehicles	$150,000.00$
Land	$350,000.00$

In November 2019, the company disposed of the assets for the following amounts:

ASSET	COST (GHc)
Computers	$70,000.00$
Motor Vehicles	$160,000.00$
Land	$450,000.00$

In January 2020, the company acquired a new office building at the cost of GHc600,000.

Answer

Find Related Questions by Tags, levels, etc.

Topic: Taxation of Capital Transactions
Series: FEBRUARY 2021

STP – Feb 2021 – L2 – Q1 – Strategic Tax Planning

Advise on tax implications of AIG acquiring 55% stake in Fluid Logistics Ghana and providing a GH₵6.5M loan, plus tax planning options.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Acquisition, Arm's Length, Corporate Tax, Debt-to-Equity Ratio, Ghana tax law, Income Tax, Loan, Tax implications, Tax Planning, Thin Capitalization
Level: Level 2

Topic: Tax Strategies for Business Growth and Expansion, Taxation of Capital Transactions
Series: FEBRUARY 2021

Question Tag: Tax Planning

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STP – Feb 2020 – L2 – Q5 – Anti-Avoidance Provisions

Identify and discuss three anti-avoidance provisions in the Income Tax Act, 2015 (Act 896) and their limitations on tax planning.

You're reporting an error for "STP – Feb 2020 – L2 – Q5 – Anti-Avoidance Provisions"

STP – Feb 2020 – L2 – Q4 – Business Entity Tax Implications

Advise on tax implications of establishing a company, partnership, or sole proprietorship and identify which offers the least tax exposure for an investor.

You're reporting an error for "STP – Feb 2020 – L2 – Q4 – Business Entity Tax Implications"

STP – Aug 2020 – L2 – Q3 – Ownership Change Tax Implications

Discuss income tax implications for Obibini Ghana Limited if an investor acquires 51% of its shares.

You're reporting an error for "STP – Aug 2020 – L2 – Q3 – Ownership Change Tax Implications"

STP – Aug 2020 – L2 – Q2 – Corporate Restructuring

Restructure Mr. Kofi Opoku’s companies to reduce tax exposure and provide cheaper financing for Speed Transport Ghana Limited.

You're reporting an error for "STP – Aug 2020 – L2 – Q2 – Corporate Restructuring"

STP – Aug 2020 – L2 – Q1 – Tax Planning vs. Tax Avoidance

Discuss distinction between tax planning and tax avoidance under Ghanaian tax law with examples and references.

You're reporting an error for "STP – Aug 2020 – L2 – Q1 – Tax Planning vs. Tax Avoidance"

STP – Aug 2018 – L2 – Q1 – Taxation of Capital Transactions

Advise Welmount Ghana Ltd on tax implications of selling land and shares, and measures to mitigate tax exposure.

You're reporting an error for "STP – Aug 2018 – L2 – Q1 – Taxation of Capital Transactions"

STP – Feb 2021 – L2 – Q5 – Non-tax Factors for Investment Location

State and explain three non-tax factors influencing the choice of investment location.

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STP – Feb 2021 – L2 – Q4 – Taxation and Operating Strategies

Explain three anti-avoidance provisions in Ghana's Income Tax laws and their impact on tax planning.

You're reporting an error for "STP – Feb 2021 – L2 – Q4 – Taxation and Operating Strategies"

STP – Feb 2021 – L2 – Q3 – Taxation of Capital Transactions

Advise Tremor Ghana Ltd on tax implications of asset disposals and tax planning opportunities.

You're reporting an error for "STP – Feb 2021 – L2 – Q3 – Taxation of Capital Transactions"

STP – Feb 2021 – L2 – Q1 – Strategic Tax Planning

Advise on tax implications of AIG acquiring 55% stake in Fluid Logistics Ghana and providing a GH₵6.5M loan, plus tax planning options.

You're reporting an error for "STP – Feb 2021 – L2 – Q1 – Strategic Tax Planning"

STP – Feb 2020 – L2 – Q5 – Anti-Avoidance Provisions

Identify and discuss three anti-avoidance provisions in the Income Tax Act, 2015 (Act 896) and their limitations on tax planning.

You're reporting an error for "STP – Feb 2020 – L2 – Q5 – Anti-Avoidance Provisions"

STP – Feb 2020 – L2 – Q4 – Business Entity Tax Implications

Advise on tax implications of establishing a company, partnership, or sole proprietorship and identify which offers the least tax exposure for an investor.

You're reporting an error for "STP – Feb 2020 – L2 – Q4 – Business Entity Tax Implications"

STP – Aug 2020 – L2 – Q3 – Ownership Change Tax Implications

Discuss income tax implications for Obibini Ghana Limited if an investor acquires 51% of its shares.

You're reporting an error for "STP – Aug 2020 – L2 – Q3 – Ownership Change Tax Implications"

STP – Aug 2020 – L2 – Q2 – Corporate Restructuring

Restructure Mr. Kofi Opoku’s companies to reduce tax exposure and provide cheaper financing for Speed Transport Ghana Limited.

You're reporting an error for "STP – Aug 2020 – L2 – Q2 – Corporate Restructuring"

STP – Aug 2020 – L2 – Q1 – Tax Planning vs. Tax Avoidance

Discuss distinction between tax planning and tax avoidance under Ghanaian tax law with examples and references.

You're reporting an error for "STP – Aug 2020 – L2 – Q1 – Tax Planning vs. Tax Avoidance"

STP – Aug 2018 – L2 – Q1 – Taxation of Capital Transactions

Advise Welmount Ghana Ltd on tax implications of selling land and shares, and measures to mitigate tax exposure.

You're reporting an error for "STP – Aug 2018 – L2 – Q1 – Taxation of Capital Transactions"

STP – Feb 2021 – L2 – Q5 – Non-tax Factors for Investment Location

State and explain three non-tax factors influencing the choice of investment location.

You're reporting an error for "STP – Feb 2021 – L2 – Q5 – Non-tax Factors for Investment Location"

STP – Feb 2021 – L2 – Q4 – Taxation and Operating Strategies

Explain three anti-avoidance provisions in Ghana's Income Tax laws and their impact on tax planning.

You're reporting an error for "STP – Feb 2021 – L2 – Q4 – Taxation and Operating Strategies"

STP – Feb 2021 – L2 – Q3 – Taxation of Capital Transactions

Advise Tremor Ghana Ltd on tax implications of asset disposals and tax planning opportunities.

You're reporting an error for "STP – Feb 2021 – L2 – Q3 – Taxation of Capital Transactions"

STP – Feb 2021 – L2 – Q1 – Strategic Tax Planning

Advise on tax implications of AIG acquiring 55% stake in Fluid Logistics Ghana and providing a GH₵6.5M loan, plus tax planning options.

You're reporting an error for "STP – Feb 2021 – L2 – Q1 – Strategic Tax Planning"

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