Question Tag: Withholding Tax

Search 500 + past questions and counting.

  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

  • 10 Marks

AT – Nov 2024 – L3 – Q5b – Tax Implications of Foreign Acquisition

Evaluate the tax implications of a 70% equity acquisition by a foreign company and the proposed funding option

Baimbil LTD, based in Australia, has decided to acquire a company in Ghana instead of starting a new one.

The shareholders of Borketey LTD, a resident company in Ghana, have decided to sell the company due to cash flow challenges. As a result, Baimbil LTD approached the management of Borketey LTD and engaged a consultancy firm to perform due diligence checks. Following this, Baimbil LTD acquired 70% of the equity of Borketey LTD.

Below is an extract from the books of Borketey LTD for the 2023 year of assessment:

Description Amount (GH¢)
Share Capital 1,000,000
Retained Earnings (500,000)
Shared Deals 50,000
Bad Debts (Sold to MN LTD, now bankrupt) 1,000,000

Proposed Financing by Baimbil LTD:

The following proposals have been tabled for consideration after the acquisition:

  1. Baimbil LTD to provide GH¢100 million as debt with 2% interest above the market rate.
  2. Baimbil LTD to provide GH¢100 million as additional equity capital.
  3. Baimbil LTD to provide collateral for a bank facility of GH¢100 million in Ghana.

Required:

(i) Evaluate the tax implications of the 70% equity acquisition.

(ii) Evaluate the tax implications of the three proposed financing options.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AT – Nov 2024 – L3 – Q5b – Tax Implications of Foreign Acquisition"

  • 5 Marks

PT – Nov 2024 – L2 – Q5b – Withholding Tax & VAT Calculation

Compute VAT and direct tax withheld on a taxable supply of medical consumables to a tax withholding agent.

Charley Chemist LTD made a taxable supply of medical consumables amounting to GH¢750,000 exclusive of VAT and levies on 23 November 2023 to the University of Ghana Medical Centre. The University of Ghana Medical Centre is a withholding tax agent for both VAT withholding and Direct Tax withholding.

Required:
i) Compute the amount of VAT withheld by the University of Ghana Medical Center. 
ii) Compute the amount of direct tax withheld by the University of Ghana Medical Centre.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "PT – Nov 2024 – L2 – Q5b – Withholding Tax & VAT Calculation"

  • 5 Marks

PT – Nov 2024 – L2 – Q5a – Notification to Commissioner-General for Non-Resident Contracts

Requirements for notifying the Commissioner-General when a resident contracts a non-resident.

For the purpose of withholding tax, the Income Tax Act, 2016 (Act 896) requires a resident person who enters into a contract with a non-resident person which gives rise to income from Ghana to notify the Commissioner-General within thirty (30) days.

Required:

State the items that must be detailed in the notification to the Commissioner-General.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "PT – Nov 2024 – L2 – Q5a – Notification to Commissioner-General for Non-Resident Contracts"

  • 15 Marks

ATAX – May 2016 – L3 – Q5 – Taxation of Companies

Compute the original and revised tax liabilities of Atlas Nigeria Limited, considering tax official adjustments.

Atlas Nigeria Limited is into the sale of Mobile Phones, and the company’s year-end is December 31 of each year. The company’s Annual Tax Returns for the year ended December 31, 2012, were submitted in January 2014. Tax officials found a number of irregularities during a routine examination of the Tax Returns. They discovered that trade payables included N940,000 representing VAT for the two months to December 31, 2012. All sales attract VAT. There was no Input VAT during 2012. Tax officials were, however, of the opinion that the income of the company accrued uniformly throughout the 12 months of the year.

The accounts showed Adjusted Profits of N44,062,500, and Capital Allowances totaled N33,025,000. The tax liability arrived at was N4,406,250. The tax officials were not satisfied with the explanations received in connection with the Withholding Tax on the Director’s fee of N1,562,500, as well as Consultancy fee of N812,500. They also decided to write back 2/3 of the following expenses:

  • Printing and Stationery N168,750
  • Donations and Subscription N1,320,620
  • Losses claimed, amounting to N128,025 was disallowed. Included in the adjusted profit figure is N6,962,500 for Depreciation.

REQUIRED:

i. Show the computations resulting in the Original Tax Liability of N4,406,250 (5 marks)

ii. Compute a revised Tax liability based on the findings of the Tax Officials (10 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "ATAX – May 2016 – L3 – Q5 – Taxation of Companies"

  • 15 Marks

AT – Nov 2016 – L3 – SC – Q5 – Tax Incentives and Reliefs

Identify industries qualifying as Pioneer Industries and compute tax liabilities and withholding tax for Ajanaku Nigeria Limited.

a. **One of the incentives available to industries in Nigeria is contained in the Industrial Development (Income Tax Relief) Act 1971, which grants tax holidays to companies in the industries that meet the conditions for being designated “Pioneer Industries.”

Under the Industrial Development (Income Tax Relief) Act 1971, state any FOUR industries that qualify to be regarded as Pioneer Industries.** (4 Marks)

b. Ajanaku Nigeria Limited was incorporated as a pioneer company on March 15, 2011, with a focus on the manufacture of aluminum roofing sheets. It was granted a Pioneer Certificate with Production Day given as July 1, 2011. Extracts of Audited Financial Statements are as shown below:

Period 6 Months to 31/12/11 Year to 31/12/12 Year to 31/12/13 Six Months to 30/6/14
(Loss) / Profit (3,750) (4,800) 2,250 4,500
After Charging: Depreciation 2,800 2,500 1,700 1,000
Withholding Tax on Rent Included 500 250 – –
Donations to:
Epe Traditional Dance Troupe 10 – – –
Nigerian Red Cross – 100 – –
Borno State General Hospital – – 120 –

Additional Information:

  • Ajanaku Nigeria Limited declared gross dividends of ₦600,000 and ₦1,500,000 for 2013 and 2014, respectively.
  • Withholding tax rates on dividends for the relevant years are 10%.
  • Ignore minimum tax provisions.
  • The company’s initial tax relief period was not extended.

Required:
Compute the tax liabilities for the relevant years of assessment relating to Pioneer Status only, and state the amount of Withholding Tax due from the shareholders. (11 Marks)

a. Four Industries Qualifying as Pioneer Industries:

  1. Agricultural production, including food processing and packaging.
  2. Manufacturing, such as aluminum products and roofing sheets.
  3. Mining and processing of minerals, including petroleum refining.
  4. Telecommunication and information technology.

b. Computation of Tax Liabilities and Withholding Tax for Ajanaku Nigeria Limited:

Step 1: Pioneer Period

  • Pioneer period runs from July 1, 2011, to June 30, 2014.

Step 2: Loss/Profit Exemption During Pioneer Period

  • Losses incurred during the pioneer period are disregarded for tax purposes.
  • Profits during the pioneer period are exempt from tax.

Step 3: Dividend Withholding Tax (WHT):

Year Gross Dividend (₦’000) Withholding Tax Rate (%) WHT Amount (₦’000)
2013 600 10 60
2014 1,500 10 150

Total Withholding Tax Due = ₦60,000 + ₦150,000 = ₦210,000.

Final Tax Liabilities:

  • Since Ajanaku Nigeria Limited’s profits during the pioneer period are exempt from tax, Tax Liability = ₦0.

Withholding Tax Due from Shareholders:

  • Total Withholding Tax on dividends for 2013 and 2014 is ₦210,000.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AT – Nov 2016 – L3 – SC – Q5 – Tax Incentives and Reliefs"

  • 30 Marks

ATAX – May 2017 – L3 – Q1 – Overview of Advanced Taxation

Explain tax concepts and calculate Companies Income Tax due for Rex Pharmaceuticals.

You are the Tax Controller of Rex Pharmaceuticals (Nigeria) Limited having its Head Office in Ketu, Epe Local Government of Lagos State.

In the past three years, the company had been subjected to taxes by different Revenue Authorities within Lagos State and indeed, the entire country.

Apart from the Companies Income Tax, the issue of Withholding Tax is an area where the company’s management is very much concerned. The Managing Director is worried that this multiplicity of taxes is taking its toll on the company’s financials.

The company is already facing myriads of problems ranging from outrageous cost of capital which had led to increase in cost of production and attendant decrease in profit. The company’s goods are becoming uncompetitive, compared to imported goods. The long-term effect is either reduction in workforce or relocation to a more favorable economic climate.

The Managing Director summoned you to his office and among the issues raised at the meeting were:

(i) as a corporate body, the company ought not to be subjected to multiplicity of taxes beyond the Companies Income Tax;
(ii) the jurisdiction of the tiers of Government in imposition and collection of taxes;
(iii) the Withholding Tax;
(iv) the Pay As You Earn as it affects the staff; and
(v) the Capital Gains Tax.

You have also been informed of the following:

  1. The company’s technical agreement with the foreign Head Office and the need to remit funds;
  2. The Non-Executive Directors;
  3. The Non-Resident directors are to receive N2,500,000;
  4. Centralization of staff PAYE deductions;
  5. Dividend payment to shareholders in different parts of the country. Those resident in Kogi are to receive N375,000;
  6. Land for a factory in Abuja purchased from Alhaji Garuba Maito who resides in Kano;
  7. Rex Pharmaceuticals received N4,500,000 as Net dividend from an associated company Laiketop Limited for the year ended September 30, 2014. In the Audited Financial Statements of Rex Pharmaceuticals for the year ended December 31, 2015, a dividend of N9,500,000 was proposed. Out of this amount, N3,500,000 was from dividend received from Laiketop Limited while the balance was from a Total Profit of N22,500,000 from other trading activities;
  8. At present, out of the thirty employees in Abuja, five are resident in Suleja, Niger State.

Required:

(a) Explain briefly the following:
i. Capital Gains Tax
ii. Withholding Tax
iii. Double Taxation Treaty
iv. Multiple Taxation (12 Marks)

(b) Discuss measures put in place by the government to reduce cases of multiple taxation. (6 Marks)

(c) State the arms of government empowered by the Constitution to legislate on tax matters. (6 Marks)

(d) Determine the Companies Income Tax due from Rex Pharmaceuticals Limited for the year ended December 31, 2015. (6 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "ATAX – May 2017 – L3 – Q1 – Overview of Advanced Taxation"

  • 11 Marks

ATAX – Nov 2016 – L3 – Q5b – Tax Incentives and Reliefs

Calculates tax liabilities for a pioneer company and withholding tax on dividends during the pioneer period.

Ajanaku Nigeria Limited was incorporated as a pioneer company on March 15, 2011, focusing on aluminum roofing sheets. It received a Pioneer Certificate with Production Day as July 1, 2011. Extracts from its Audited Financial Statements are as follows:

Gross dividends declared:

  • 2013: N600,000
  • 2014: N1,500,000

Withholding tax rate on dividends for these years is 10%. Ignore Minimum Tax provisions. The initial tax relief period was not extended.

You are required to:

  • Compute the tax liabilities for the relevant years of assessment relating to Pioneer Status only.
  • State the amount of Withholding Tax due from the shareholders. (11 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "ATAX – Nov 2016 – L3 – Q5b – Tax Incentives and Reliefs"

  • 20 Marks

AT – May 2024 – L3 – SB – Q3 – Double Taxation Reliefs and Credits

Calculation of double taxation relief and tax liabilities for Lagode Nigeria, including implications of double taxation treaties.

Lagode Nigeria Limited, based in Lagos, Nigeria, commenced operations as a manufacturer of indigenous fabrics in 2013. Products are sold to wholesalers and retailers in Nigeria and to Africans in diaspora, particularly during annual holiday periods. A market survey in 2018 revealed a lack of local Nigerian fabric manufacturers in North America, prompting the company to establish Kuramo Incorp. in Ottawa, Canada, which began operations in January 2020.

The operating results for both locations for the year ended December 31, 2022, are as follows:

Description Lagos, Nigeria (N’000) Ottawa, Canada (N’000)
Gross turnover 180,200 330,800
Less: Expenses
– Cost of materials 72,100 162,320
– Wages and salaries 18,050 42,120
– Finance costs 1,400 3,150
– Miscellaneous 4,600 5,270
– Depreciation 5,760 8,750
– Share of head office expenses 25,600 16,040
– Foreign tax paid – 18,900
Total expenses 127,510 256,550
Net profit 52,690 74,250

Additional Information:

  1. Ottawa branch is a wholly owned Nigerian company.
  2. Miscellaneous expenses are allowable for tax purposes.
  3. Capital allowances agreed with Nigerian tax authorities:
    Location Capital Allowance (N’000)
    Lagos operations 6,800
    Ottawa operations 9,900
  4. The exchange rate for Canadian operations is fair.
  5. No double taxation agreement exists between Nigeria and Canada.

Required:
In accordance with the provisions of the Companies Income Tax Act Cap. C21 LFN 2004 (as amended), you are to: a. Compute the double taxation relief (if any) available to the Nigerian company

(9 Marks)
b. Advise on the tax liabilities of the Nigerian company for the relevant assessment year (9 Marks)
c. Comment on the implications of double taxation agreements on withholding tax deductions by a company resident in a country:
(i) With no double taxation agreement with Nigeria

(1 Mark)
(ii) With double taxation treaty with Nigeria (1 Mark)
Total: 20 Marks

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AT – May 2024 – L3 – SB – Q3 – Double Taxation Reliefs and Credits"

  • 30 Marks

AT – May 2018 – L3 – SA – Q1 – Taxation of Corporations

Discuss multiple taxation, jurisdiction, withholding tax, and penalties related to Rex Pharmaceuticals.

You are the tax controller of Rex Pharmaceuticals (Nigeria) Limited, having its head office at Ketu in Epe local government of Lagos State.

In the past three years, the company had been subjected to an array of taxes by different revenue authorities within Lagos State and indeed the entire country.

Apart from the Companies Income Tax, Withholding Tax is another tax that the company‟s management is concerned about. The Managing Director is very much worried that this multiplicity of taxes is taking its toll on the company‟s financials.

The company is already facing myriads of problems ranging from high cost of capital which led to increase in cost of production and attendant reduction in profit. The company‟s goods are becoming uncompetitive compared with imported similar goods. The long term effect is either reduction in work force or relocation to a more favourable economic environment. The Managing Director has invited you to his office to discuss the following issues:

(i) Whether as a corporate body, the company ought to be subjected to myriads of taxes beyond the corporate tax;

(ii) The jurisdiction of the tiers of government in the imposition and collection of taxes;

(iii) Withholding Tax;

(iv) Pay-As-You-Earn (PAYE) as it affects the staff; and

(v) Capital Gains Tax.

You have also been provided with the following information:

  • The company‟s technical agreement with the foreign head office and the need to remit funds;
  • Non-resident directors are to receive N2,500,000;
  • Staff P.A.Y.E has been centralised;
  • Dividend has been paid to shareholders in different parts of the country, and those resident in Kogi State of Nigeria, received N375,000;
  • Land for a factory in Abuja was purchased from Alhaji Garuba Maito who resides in Kano;
  • The company received N4,500,000 as net dividend from an associated company, Laiketop Limited, for the year ended September 30, 2014;
  • In the audited financial statements of Rex Pharmaceuticals for the year ended December 31, 2015, a dividend of N9,500,000 was proposed. Out of this amount, N3,500,000 was from dividend received from Laiketop Limited while the balance was from a Total Profit of N22,500,000 from other trading activities; and
  • Out of the thirty employees in Abuja, five are resident in Suleja, Niger State.

You are required to prepare a memo to the Managing Director explaining the following:

(a) i. Double/Multiple Taxation.
ii. Double Taxation Treaty.
iii. Multiple Taxation in Nigeria.
iv. Measures put in place to reduce cases of multiple taxation in Nigeria.
v. Withholding Tax with respect to (i) to (v).
vi. Penalty for non-deduction/remittance of Withholding Tax. (12 Marks)

(b) The arms of government empowered to legislate on tax matters by the Constitution. (4 Marks)

(c) Relevant tax authority and the Withholding Tax due, if any. (4 Marks)

(d) i. The appropriate description of the income received from Laiketop Limited.
ii. The tax due from other trading activities of Rex Pharmaceuticals.
iii. Amount to be recouped by Rex Pharmaceuticals, if any.
iv. Net amount received by shareholders of Rex Pharmaceuticals.
v. Relevant section of the law to buttress your points in (i) and (ii) above. (10 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AT – May 2018 – L3 – SA – Q1 – Taxation of Corporations"

  • 5 Marks

ATAX – Nov 2018 – L3 – Q3b – International Taxation

Permanent Establishment (PE) under the Nigeria-UK Double Taxation Agreement

b) Double taxation agreements exist among Nigeria and some foreign countries.

Required:
Explain the term “Permanent Establishment” as contained in the double taxation agreement between Nigeria and the United Kingdom.
(5 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "ATAX – Nov 2018 – L3 – Q3b – International Taxation"

  • 15 Marks

ATAX – Nov 2018 – L3 – Q3a – International Taxation

Tax implications for Sadiq Corporation's contracts executed by its Nigerian subsidiary, including PE under Nigeria-UK tax agreement.

(a) Sadiq Corporation was incorporated in Sweden as a limited liability company and has a subsidiary, Omologede Ventures Nigeria Limited located in Akure, Nigeria. Peniel Nigeria Plc awarded a contract to Sadiq Corporation to renovate a rice milling factory in Gboko, Benue State, and another in Abakaliki, Ebonyi State. The contract value for the Gboko factory is $11,064,150, and $7,337,616 for the Abakaliki factory. Sadiq Corporation later sub-contracted the two jobs to its subsidiary in Nigeria. The renovation is expected to be completed within six months.

The following information was submitted to the Federal Inland Revenue Service by Omologede Ventures Nigeria Limited for the year ended December 31, 2017:

Description Amount (N)
Direct materials 962,100,000
Scaffolding 183,538,320
Administrative expenses on hired professionals 33,352,800
Rentals on equipment 18,708,248
Maintenance of equipment 7,431,688
Personnel card (domestic) 28,803,029
Personnel cost (foreign) 14,738,250
Fees to engineers 11,298,689
Other operational costs 6,512,070

Additional Information:

  1. Capital allowance agreed by Omologede Ventures Nigeria Limited with the Federal Inland Revenue Service for the year was N104,418,744.
  2. 60% of the total contract sum was made available to Omologede Ventures Nigeria Limited.
  3. Depreciation is N69,902,092.
  4. 70% of the total contract sum was paid at the beginning of the job, while the balance was paid in September of the same year.
  5. The exchange rate at the time of signing the contract was N180 to $1. The rate changed in August of the same year to N195 to $1.

Withholding tax provisions were fully complied with by the two companies, and the tax remitted to the relevant tax authority as and when due.

Required:
As the local consultancy firm in Nigeria, provide advice to the management of the two companies on the tax implications of the contracts for the relevant year of assessment, clearly showing their tax liabilities (if any).
(15 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "ATAX – Nov 2018 – L3 – Q3a – International Taxation"

  • 15 Marks

TAX – Nov 2023 – L2 – Q6b – Tax Administration and Enforcement

Explain five key contents required in a Withholding Tax returns/payment schedule.

It is expected that a schedule of Withholding Tax (WHT) payable should be prepared by applying the correct WHT rate on each transaction/payment made during the month. Thereafter, a cheque for the amount due to the Federal Inland Revenue Service is raised and forwarded together with the WHT schedule to one of the approved collecting banks for processing.

Required:
Explain FIVE contents of a WHT returns/payment schedule. (10 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – Nov 2023 – L2 – Q6b – Tax Administration and Enforcement"

  • 15 Marks

TAX – May 2017 – L2 – SC – Q7 – Withholding Tax

Explanation of the peculiarities of withholding tax, rates for international transactions, and required particulars for a tax payment schedule.

The recently employed Accounts Officer of Oriade Limited understands that the company must report Withholding Tax information to the Revenue Authority according to the provisions of the law. Being a fresh graduate, he does not know how Withholding Tax is reported to the Revenue Authority.

Required:

a. Explain the peculiarities of Withholding Tax. (3 Marks)

b. Where international transactions are involved:

  • i. State the rate of Withholding Tax. (1 Mark)
  • ii. List the types of income involved. (3 Marks)

c. Specify the currency of payment where the currency of the transaction is not in Naira. (3 Marks)

d. List FIVE particulars contained in the Withholding Tax Payment Schedule. (5 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – May 2017 – L2 – SC – Q7 – Withholding Tax"

  • 9 Marks

TAX – Nov 2015 – L2 – Q5b – Companies Income Tax (CIT)

This question requires the computation of Adebola Nigeria Limited's tax liabilities and withholding tax payable for 2013 and 2014.

Adebola Nigeria Limited has been trading for many years. The company makes up its accounts to 31 December annually. The extracts from its Statement of Comprehensive Income for the years ended 31 December 2013 and 2014 (as adjusted for tax purposes) are as follows:

Year ended 31 December 2014 (₦) 2013 (₦)
Profit for the year 14,000,000 10,000,000
Bank interest received (gross) 2,400,000 1,600,000
Debenture interest received (gross) 800,000 800,000
Dividend received from Adesemowo Ltd. (Net) 720,000 720,000
Dividend paid to shareholders (gross) 6,000,000 4,000,000

Required:
i. Compute the company’s tax liabilities for the relevant years of assessment. Ignore capital allowances. (5 Marks)
ii. Determine the net withholding tax payable or receivable by Adebola Nigeria Limited, arising from dividends paid and received by it. (4 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – Nov 2015 – L2 – Q5b – Companies Income Tax (CIT)"

  • 6 Marks

TAX – Nov 2015 – L2 – Q5a – Withholding Tax (WHT)

This question involves highlighting the features of withholding tax and determining relevant tax authorities.

i. Briefly highlight the main features of Withholding Tax.
ii. State the relevant tax authorities in relation to Withholding Tax in Nigeria.
iii. Enumerate the contents of a Payment Schedule for the remittance of Withholding Tax.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – Nov 2015 – L2 – Q5a – Withholding Tax (WHT)"

  • 9 Marks

TAX – Nov 2020 – L1 – SA – Q2b – Taxation of Trusts and Estates

Compute the assessable profit for XYZ Unit Trust Scheme for the year ended December 31, 2018.

In 2004, Chief Kris Uzodime applied to the Securities and Exchange Commission (SEC) for an approval to float XYZ Unit Trust Scheme. In 2005, XYZ Unit Trust Scheme secured an approval to deal in the business of a unit trust scheme.

Its statement of profit or loss for the year ended December 31, 2018, revealed the following:

Description Amount (N)
Investment income
Rental income (gross) 12,650,000
Interest on bank deposit (gross) 5,140,000
Dividend received (gross) 16,300,000
Total Investment Income 34,090,000
Less:
Staff salaries and wages 9,300,000
Manager’s remuneration (20% of gross income) 6,818,000
Other expenses 1,020,000
Bank charges and commission 170,500
Depreciation 321,600
Total Expenses 17,630,100
Net profit 16,459,900

Additional information:
(i) Other expenses include:

  • Loss on disposal of property, plant and equipment: N121,000
  • Preliminary expenses: N210,000
  • Office furniture acquired: N300,500

(ii) All the incomes were subjected to deductions of withholding tax.

Required:
Compute the assessable profit for the relevant assessment year.
(9 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – Nov 2020 – L1 – SA – Q2b – Taxation of Trusts and Estates"

  • 1 Marks

TAX – Nov 2020 – L1 – SA – Q10 – Withholding Tax (WHT)

Identify the penalty rate per annum for failure to deduct or remit withholding tax.

A person who is obliged to deduct withholding tax but fails to deduct, or having deducted, fails to remit on the due date, shall be guilty of an offence and liable to a penalty of _________ per annum of the tax withheld or not remitted, as the case may be:
A. 25%
B. 21%
C. 15%
D. 10%
E. 5%

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – Nov 2020 – L1 – SA – Q10 – Withholding Tax (WHT)"

  • 1 Marks

TAX – Nov 2020 – L1 – SA – Q9 – Withholding Tax (WHT)

Identify which type of income is not subject to withholding tax in Nigeria.

Which of the following is NOT subject to withholding tax in Nigeria?
A. Salary
B. Commissions
C. Rent
D. Dividend
E. Professional fees

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – Nov 2020 – L1 – SA – Q9 – Withholding Tax (WHT)"

  • 15 Marks

TAX – May 2022 – L2 – SA – Q5 – Withholding Tax (WHT)

Discuss the contents of withholding tax returns, the time frame for compliance, and the merits and demerits of the withholding tax scheme.

Withholding tax is a tax deducted at source from proceeds made to a taxable person for the supply of goods and services. It is not another form of tax, but simply an advance payment of tax, as the withholding tax deducted at source is off-set against any subsequent tax liability that may be due in respect of the income.

Required:
a. State the contents of withholding tax returns/payment schedule. (5 Marks)
b. State the time frame for compliance with withholding tax returns. (5 Marks)
c. Explain the merits and demerits of the withholding tax scheme. (5 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – May 2022 – L2 – SA – Q5 – Withholding Tax (WHT)"

  • 1 Marks

TAX – May 2021 – L1 – SA – Q9 – Tax Administration and Enforcement

Multiple-choice question regarding the time frame for refund of excess withholding tax deducted.

In line with the Federal Inland Revenue Service (Establishment) Act, 2007, any excess withholding tax deducted should be refunded within……………….of the decision of the Service of refund.
A. 120 days
B. 90 days
C. 60 days
D. 40 days
E. 30 days

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – May 2021 – L1 – SA – Q9 – Tax Administration and Enforcement"

Elevate your professional expertise across key business domains with our comprehensive training programs

Our offerings

Contact Info

  • +233203701923
    +233543919232
  • info@knowsia.com

Customer

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope
Oops!

This feature is only available in selected plans.

Click here to view all plans

Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.

Login
Upgrade Plan

If you’re not subscribed to a plan, click on the button below to choose a plan

Subscribe to a plan