Series: AUG 2015

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ATP – Aug 2015 – L2 – Q5 – Tax Compliance Framework

List three circumstances where filing a Return of Income is not required under the Internal Revenue Act.

Question

(a). Mr. Tanko Alhassan is the Head of Customer Service Department of Saabhot Company Limited. The following information is extracted from his Tax Return for 2014 year of assessment.

	GH¢
Basic salary (2014)	144,000.00
Responsibility allowance	3,600.00
Professional allowance	2,500.00
House-Help allowance	2,800.00
Entertainment allowance	4,500.00

Mr. Tanko Alhassan was paid a bonus of GH¢45,800.00 by his employer on 27th February 2015 in respect of his performance for the year 2014. He uses his own private car for official duties for which he was given a monthly reimbursable fuel allowance of GH¢1,000.00. He is a divorcee with two children who attends Christ the King Junior High School in Accra. As part of the company’s policy to support brilliant children, each of Mr. Tanko Alhassan’s children are on an annual educational bursary of GH¢3,000.00.

He contributes 5.5% of his salary to the Social Security Scheme and an additional 5% to a Staff Provident Fund Scheme under the National Pensions Act, 2008 (Act 766). His employer, Saabhot Company Limited contributes on his behalf 13% and 5% of his salary to the Social Security Scheme and the Staff Provident Fund Scheme respectively.

You are required to compute the tax liability of Mr. Tanko Alhassan for the 2014 year of assessment.

(b). Under section 72 of the Internal Revenue Act, 2000 (Act 592) as amended, persons are generally required to furnish Returns of Income to the Ghana Revenue Authority. Except as may be required by the Commissioner-General by notice in writing that a person files a return, the Internal Revenue Act, 2000 (Act 592) as amended, provides exception from filing of Return of Income.

You are required to indicate only three circumstances where the filing of a Return of Income is not required under the Internal Revenue Act, 2000 (Act 592) as amended.

Answer

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Tags: Exemptions, Income Tax, Non-resident, Tax Returns, Withholding Tax
Level: Level 2

Topic: Tax Compliance Framework
Series: AUG 2015

ATP – Aug 2015 – L2 – Q4 – Income Tax Computation

Compute chargeable income for partners of Zee & Associates for 2012-2014, including capital allowances.

Question

Ace, Brace and Crate have been in partnership since 2006 trading as Zee & Associates dealing in cement and preparing accounts to December 31 each year. Their Partnership Agreement showed that they share profits in the ratio 5:4:3 respectively.

The written-down values of the assets used in their operations as at 31st December, 2011 were as follows:

	GH¢
Office Equipment	148,000.00
Pick–up vehicles	95,000.00
Saloon vehicles	80,000.00

Brace resigned from Zee & Associates on 2nd January 2013 and on his exit, Ace and Crate continued the business agreeing to share profits in the ratio 2:1 respectively.

The partnership Firm acquired the following additional assets:

a) A building for office annex costing GH¢430,000.00 on 4th October, 2013.

b) One Toyota Camry for GH¢85,000.00 on 26th March 2012

c) One Toyota Land Cruiser Prado at a cost of GH¢188,000.00 on 3rd July, 2013

Some of the office equipment were sold on 15th June, 2013 for GH¢35,000.00.

The Firm’s adjusted profits for tax purposes but before grant of capital allowance were as follows:

Year to 31/12/2012	GH¢315,000.00
Year to 31/12/2013	GH¢298,000.00
Year to 31/12/2014	GH¢328,000.00

You are required to compute the chargeable income, if any, of each partner for the relevant years of assessment on the assumption that no other incomes accrued to any of the partners.

Answer

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Tags: Capital allowances, chargeable income, Partnership Taxation, Profit Sharing, Tax computation
Level: Level 2

Topic: Income Tax Computation
Series: AUG 2015

ATP – Aug 2015 – L2 – Q3 – Income Tax Computation

Advise on tax implications of loans from Zenith Bank and Bank of America for Zabta Company.

Question

(a). Zabta Company Limited has been in operation in Ghana for less than two years. The Managing Director is not comfortable with the Head of Finance with regard to the manner in which he handles tax issues of the company and has therefore sought your advice on the tax implications of the following intended transactions by the company: i) Borrowing from Zenith Bank (Ghana) Limited of an amount of GHS2.50 million at an interest rate of 28% per annum and a commitment fee of 1% flat. ii) Borrowing from Bank of America (in the USA) of an amount of US$4.00 million at an interest rate of 9% per annum and a commitment fee of 0.3% flat.

As a newly appointed tax consultant of the company, you are required to advise the Managing Director (in a memorandum) of the tax implications of the above transactions.

(b). You have been recently appointed an Advisor responsible for Finance and Tax at the office of the Chief of Staff of Ghana. The Chief of Staff has requested you for a reasoned write-up of the taxability status of the Vice-President of the Republic of Ghana under the Internal Revenue Act, 2000 (Act 592) as amended.

You are required to explain the taxability status of the Vice-President of the Republic of Ghana under the provisions of the Internal Revenue Act, 2000 (Act 592), as amended with respect to income tax, capital gains tax, and gift tax.

Answer

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Tags: Borrowing, Ghana tax laws, Interest Deduction, VAT, Withholding Tax
Level: Level 2

Topic: Income Tax Computation
Series: AUG 2015

ATP – Aug 2015 – L2 – Q2 – Employment Income Taxation

List conditions for tax-exempt passage allowances for expatriates under Ghana tax laws.

Question

(a). As a tax consultant, you have been contacted by a prospective investor who is planning his staff budget for expatriates and would like to know if there are any qualifying conditions under which allowances or payments made to an employee (expatriate) by an employer for a passage to or from Ghana in respect of that person’s appointment or termination of employment will not be taxed in the hand of that person (employee) under the tax laws of Ghana.

You are required to indicate the three qualifying conditions available under the Internal Revenue Act, 2000 (Act 592) as amended.

(b). Under what circumstances will a person who owns a chargeable asset be deemed to have realized the asset in accordance with the provisions of the Internal Revenue Act, 2000 (Act 592) as amended. Are there any exceptions?

(c). Jones Lamptey completed construction of a building at a cost of GHS105,000.00 in June 2011 at Madina. In April 2014, he had undertaken repairs to the building amounting to GHS3,600.00 as a result of cracks and leakages to the roof. In June 2014, he also paid an amount of GHS800 for fire insurance on the building to State Insurance Company of Ghana. In September 2014, Jones sold the house to Abeiku Martey for GHS150,900.00 and paid sales commission of 3% of the sales proceed to Dumsor Real Estate Agency, who arranged and facilitated the transaction. In November 2014, Jones used GHS130,000.00 of the sales proceed of the building at Madina to purchase another building at Lakeside Estate because he wanted to live in a gated community.

You are required to determine capital gains, if any, accruing to Jones Lamptey from these transactions.

Answer

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Tags: Expatriate Allowances, Ghana tax laws, Income Tax, Passage Costs
Level: Level 2

Topic: Employment Income Taxation
Series: AUG 2015

ATP – Aug 2015 – L2 – Q1 – Income Tax Computation

Advise on tax implications of church income and pastoral allowances under Ghana tax laws.

Question

(a). The Pastoral Council of the Church of Soul Resurrection has approached you as a tax consultant for tax advice on the operations of the Church, including allowances paid to the Pastors and other Reverend Ministers. You are informed that the income of the Church is from donations, offertories and tithes from its congregants which are used towards charitable causes in the community and the upkeep of the Church. You are also informed that the Church was registered as a company limited by guarantee under the Companies Act, 1963 (Act 179) as amended.

You are required to write a memorandum (since you also double as a member of the Pastoral Council) to the Chairman of the Pastoral Council of the Church of Soul Resurrection to explain the tax implications of the income of the Church and the allowances paid to the Pastors and other Reverend Ministers. Please note that your advice should be based on the provisions of the tax laws of Ghana.

(b). Under Section 20 of the Value Added Tax Act, 2013 (Act 870), “supply of goods” means an arrangement under which the owner of goods parts with possession of the goods, by way of sale, barter, lease, transfer, exchange, gift or similar disposition; and

“supply of services” means a supply which is not a supply of goods or money, and in the nature of the performance of services for another person; the making available of a facility or advantage; or tolerating a situation or refraining from doing an activity.”

With reference to the above quotation, you are required to indicate the activities that do not constitute supply of goods or services under the Value Added Tax Act, 2013 (Act 870).

Answer

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Tags: Allowances, Church Income, Exemptions, Ghana tax laws, Income Tax
Level: Level 2

Topic: Income Tax Computation
Series: AUG 2015

ATP – Aug 2015 – L2 – Q5 – Tax Compliance Framework

List three circumstances where filing a Return of Income is not required under the Internal Revenue Act.

Question

(a). Mr. Tanko Alhassan is the Head of Customer Service Department of Saabhot Company Limited. The following information is extracted from his Tax Return for 2014 year of assessment.

	GH¢
Basic salary (2014)	144,000.00
Responsibility allowance	3,600.00
Professional allowance	2,500.00
House-Help allowance	2,800.00
Entertainment allowance	4,500.00

You are required to compute the tax liability of Mr. Tanko Alhassan for the 2014 year of assessment.

You are required to indicate only three circumstances where the filing of a Return of Income is not required under the Internal Revenue Act, 2000 (Act 592) as amended.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Exemptions, Income Tax, Non-resident, Tax Returns, Withholding Tax
Level: Level 2

Topic: Tax Compliance Framework
Series: AUG 2015

ATP – Aug 2015 – L2 – Q4 – Income Tax Computation

Compute chargeable income for partners of Zee & Associates for 2012-2014, including capital allowances.

Question

The written-down values of the assets used in their operations as at 31st December, 2011 were as follows:

	GH¢
Office Equipment	148,000.00
Pick–up vehicles	95,000.00
Saloon vehicles	80,000.00

Brace resigned from Zee & Associates on 2nd January 2013 and on his exit, Ace and Crate continued the business agreeing to share profits in the ratio 2:1 respectively.

The partnership Firm acquired the following additional assets:

a) A building for office annex costing GH¢430,000.00 on 4th October, 2013.

b) One Toyota Camry for GH¢85,000.00 on 26th March 2012

c) One Toyota Land Cruiser Prado at a cost of GH¢188,000.00 on 3rd July, 2013

Some of the office equipment were sold on 15th June, 2013 for GH¢35,000.00.

The Firm’s adjusted profits for tax purposes but before grant of capital allowance were as follows:

Year to 31/12/2012	GH¢315,000.00
Year to 31/12/2013	GH¢298,000.00
Year to 31/12/2014	GH¢328,000.00

You are required to compute the chargeable income, if any, of each partner for the relevant years of assessment on the assumption that no other incomes accrued to any of the partners.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capital allowances, chargeable income, Partnership Taxation, Profit Sharing, Tax computation
Level: Level 2

Topic: Income Tax Computation
Series: AUG 2015

ATP – Aug 2015 – L2 – Q3 – Income Tax Computation

Advise on tax implications of loans from Zenith Bank and Bank of America for Zabta Company.

Question

As a newly appointed tax consultant of the company, you are required to advise the Managing Director (in a memorandum) of the tax implications of the above transactions.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Borrowing, Ghana tax laws, Interest Deduction, VAT, Withholding Tax
Level: Level 2

Topic: Income Tax Computation
Series: AUG 2015

ATP – Aug 2015 – L2 – Q2 – Employment Income Taxation

List conditions for tax-exempt passage allowances for expatriates under Ghana tax laws.

Question

You are required to indicate the three qualifying conditions available under the Internal Revenue Act, 2000 (Act 592) as amended.

You are required to determine capital gains, if any, accruing to Jones Lamptey from these transactions.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Expatriate Allowances, Ghana tax laws, Income Tax, Passage Costs
Level: Level 2

Topic: Employment Income Taxation
Series: AUG 2015

ATP – Aug 2015 – L2 – Q1 – Income Tax Computation

Advise on tax implications of church income and pastoral allowances under Ghana tax laws.

Question

With reference to the above quotation, you are required to indicate the activities that do not constitute supply of goods or services under the Value Added Tax Act, 2013 (Act 870).

Answer

Find Related Questions by Tags, levels, etc.

Tags: Allowances, Church Income, Exemptions, Ghana tax laws, Income Tax
Level: Level 2

Topic: Income Tax Computation
Series: AUG 2015

Series: AUG 2015

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ATP – Aug 2015 – L2 – Q5 – Tax Compliance Framework

List three circumstances where filing a Return of Income is not required under the Internal Revenue Act.

ATP – Aug 2015 – L2 – Q4 – Income Tax Computation

Compute chargeable income for partners of Zee & Associates for 2012-2014, including capital allowances.

ATP – Aug 2015 – L2 – Q3 – Income Tax Computation

Advise on tax implications of loans from Zenith Bank and Bank of America for Zabta Company.

ATP – Aug 2015 – L2 – Q2 – Employment Income Taxation

List conditions for tax-exempt passage allowances for expatriates under Ghana tax laws.

ATP – Aug 2015 – L2 – Q1 – Income Tax Computation

Advise on tax implications of church income and pastoral allowances under Ghana tax laws.

ATP – Aug 2015 – L2 – Q5 – Tax Compliance Framework

List three circumstances where filing a Return of Income is not required under the Internal Revenue Act.

ATP – Aug 2015 – L2 – Q4 – Income Tax Computation

Compute chargeable income for partners of Zee & Associates for 2012-2014, including capital allowances.

ATP – Aug 2015 – L2 – Q3 – Income Tax Computation

Advise on tax implications of loans from Zenith Bank and Bank of America for Zabta Company.

ATP – Aug 2015 – L2 – Q2 – Employment Income Taxation

List conditions for tax-exempt passage allowances for expatriates under Ghana tax laws.

ATP – Aug 2015 – L2 – Q1 – Income Tax Computation

Advise on tax implications of church income and pastoral allowances under Ghana tax laws.

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ATP – Aug 2015 – L2 – Q5 – Tax Compliance Framework

List three circumstances where filing a Return of Income is not required under the Internal Revenue Act.

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Compute chargeable income for partners of Zee & Associates for 2012-2014, including capital allowances.

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ATP – Aug 2015 – L2 – Q3 – Income Tax Computation

Advise on tax implications of loans from Zenith Bank and Bank of America for Zabta Company.

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ATP – Aug 2015 – L2 – Q2 – Employment Income Taxation

List conditions for tax-exempt passage allowances for expatriates under Ghana tax laws.

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ATP – Aug 2015 – L2 – Q1 – Income Tax Computation

Advise on tax implications of church income and pastoral allowances under Ghana tax laws.

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ATP – Aug 2015 – L2 – Q5 – Tax Compliance Framework

List three circumstances where filing a Return of Income is not required under the Internal Revenue Act.

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ATP – Aug 2015 – L2 – Q4 – Income Tax Computation

Compute chargeable income for partners of Zee & Associates for 2012-2014, including capital allowances.

You're reporting an error for "ATP – Aug 2015 – L2 – Q4 – Income Tax Computation"

ATP – Aug 2015 – L2 – Q3 – Income Tax Computation

Advise on tax implications of loans from Zenith Bank and Bank of America for Zabta Company.

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ATP – Aug 2015 – L2 – Q2 – Employment Income Taxation

List conditions for tax-exempt passage allowances for expatriates under Ghana tax laws.

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ATP – Aug 2015 – L2 – Q1 – Income Tax Computation

Advise on tax implications of church income and pastoral allowances under Ghana tax laws.

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