Subject: INTERNATIONAL TAXATION

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  • 20 Marks

IT – Feb 2020 – L1 – Q5 – Tax Treaties and Interpretation

Respond to exchange of information requests from South Africa, Netherlands, France, and Italy.

You are a tax official working in the Exchange of Information unit of Ghana Revenue Authority. You have been asked to respond to several enquiries relating to the exchange of information with tax authorities in South Africa, Netherlands, Italy and France.

a. A request came from South African Tax Authority which begins with an observation, from the previous year’s data, that taxpayers in South Africa have often failed to disclose foreign source income. South Africa requests the names of all shareholders in Company X operating from Ghana who are resident in South Africa, and information on any dividends paid to them. Company X has a very popular brand in Ghana and has large shareholders.

b. Mr. Johnson Walker is resident of Netherlands. In the course of an ongoing tax investigation, it has been identified that Mr. Johnson Walker failed to declare her bank accounts with Agricultural Development Bank in Ghana. Netherland also suspects that accounts may have been opened in the name of Mr. Johnson Walker’s daughter, Phyllis. As Phyllis is the daughter of the beneficial owner, Netherland requests information on all accounts with Agricultural Development Bank held in both Mr. Johnson Walker and Ms. Phyllis Walker’s names.

c. Yesterday you reviewed a request for information from the revenue department of France. The file, however, is back on your table today as it has been discovered that a loan application which is subject to such exchange of information contains a secret trade formula.

d. Your junior colleague has just sent you an email, asking you to differentiate between “spontaneous exchange”, exchange of information on request, and automatic exchange of information. He believes that information that has recently been obtained upon request from Italy could be of interest to South Africa Tax Authority. Assume that no exchange of information agreement exists between Italy and South Africa.

Required
What will be your response to each of the requests? State reasons for your responses.

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  • 20 Marks

Feb 2020 – L1 – Q4 – Transfer Pricing Principles

Prepare a transfer pricing report for Grape Resort Ltd to determine arm’s length pricing.

The resort industry at Ada in the Greater Accra region of Ghana is extremely popular with foreign tourists due to the Volta estuary, good weather and the range of leisure activities. These attract investments from multinational companies in the resort business. The multinational enterprises dominate the industry at Ada. The multinational enterprises operate over 90% of the resort industry servicing business clients and other travellers. There are smaller enterprises apart from the multinationals in the resort business. Multinational companies operating in the resort industry make use of central booking companies in low tax jurisdictions. These central booking companies are associated companies of the multinational. The central booking companies advertise the resorts in targeted markets, accept bookings for stay at the resorts and conclude the contracts for stay at the resorts.

A recent study by a Non-Government Organization (NGO) revealed that the multinational enterprises in the resort industry in Ghana reported minimal profits or losses for the last years.

Grape Resort Limited is a Ghanaian registered company whilst CPL Resort Limited is a Cayman Island registered company. Sunrise Pleasure Limited and CPL Resort Limited are 100% owned by the Manna Group S.A, a company resident in Austria.

Grape Resort Limited owns, manages and operates a chain of full service resorts at Ada. CPL Resort Limited advertises the resorts, accepts bookings for stay at the resorts, concludes the contracts and receives payments from clients. Special vouchers are then given to the clients. Clients present the special vouchers to Grape Resort Limited in Ada to access their services. CPL Resort Limited pays fees to Grape Resort Limited from the payment it receives from the clients. Some local and foreign clients book, patronize and pay for the resort services directly at the Grape Resort Limited. Grape Resort Limited is among the multinationals that has reported losses from their operation of resorts in Ghana for the last 5 years.

Required:
Prepare a preliminary Transfer Pricing Report for the management of Grape Resort Limited on how to determine the arm’s length price of their products and services in Ghana based on the information you have at your disposal.

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  • 20 Marks

IT – Feb 2020 – L1 – Q3 – Double Taxation and Relief

Advise Mauritius on double taxation relief for investments in Ghana under proposed DTA.

Mauritius seeks to enter into a Double Taxation Agreement (DTA) with Ghana. From the context of the consultation so far held with Ghana, it is evident that Mauritius intends to negotiate the DTA in order to enable its corporate sector to invest capital in Ghana. Mauritius and Ghana operate worldwide system of taxation, but Ghana has high tax rate than Mauritius.

The Minister of Finance in Mauritius approached Kinsful Tax Practitioners, a Chartered Tax Practitioners, in Ghana to advise Mauritius on the most appropriate method of double taxation relief to be included in the proposed Ghana/Mauritius Double Taxation Agreement as it impacts on portfolio investment, direct share ownership and permanent establishment.

Required
(a). As the Head of Tax at Kinsful Tax Practitioners, prepare a briefing note to the Minister of Finance of Mauritius in which you set out your advice.

(bi). State the process by which a Double Taxation Agreement can be operative in Ghana.

(bii). When interpreting a Double Taxation Agreement (DTA), where a term is not defined in the DTA itself, what should the parties do?

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  • 20 Marks

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

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)

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  • 20 Marks

IT – Feb 2020 – L1 – Q1 – Taxation of Non-Residents

Advise on UK tax liability for payments to a Ghanaian company under Ghana-UK DTA.

Dzoboku Lullaby Limited is a Ghanaian music and orchestral company. Syntax Promotion, a company resident in the United Kingdom, extended an invitation to Dzoboku Lullaby Limited to a musical concert held in London in December, 2019.

Professor Abu, an employee of Dzoboku Lullaby Limited, was billed to perform for Syntax at two separate concerts in London, one at Gustaff Hall and the other at Gibson Hall. The following payments were made to Dzoboku Lullaby Limited by Syntax Promotion:
a. £100,000 for the public performance at the Gustaff Hall.
b. £20,000 for using the Professor’s image to advertise. The payment was deposited into Dzoboku Lullaby Limited’s bank account.
c. £50,000 for the cancellation of Gibson Hall’s event.
d. 2% of the gate proceeds received.
e. 20% of income that accrued from businesses that advertised at the Gustaff Hall event.

Her Majesty Revenue and Customs (HMRC) in the United Kingdom wrote to the Syntax Promotion demanding tax in respect of all incomes paid to Dzoboku Lullaby Limited. Syntax objected to the HMRC request stating that Dzobuku Lullaby Limited has no Permanent Establishment in the United Kingdom and, therefore, cannot be liable for a United Kingdom tax on business income earned by Dzoboku Lullaby Limited since there is a double tax agreement between Ghana and the United Kingdom.

Think Tank Consulting, a firm of Chartered Tax Practitioners in Accra was consulted by Syntax Promotion to advise them on the HMRC demand.

You are a Chartered Tax Practitioner in the employment of Think Tank Consulting and Syntax request was referred to you to deal with by your Managing Partner.

Required
Prepare a briefing note to the Managing Partner of Think Tank Consulting in which you set out clearly, with reasons, whether United Kingdom’s tax is due on each of the payments made to Dzoboku Lullaby Company Limited as demanded by the HMRC.

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  • 20 Marks

IT – Aug 2020 – L1 – Q5 – E-Commerce and International Tax Challenges

Identify and explain three Pillar One proposals for taxing rights in the digital economy.

a) In the policy note to address the tax challenges of the digitalization of the economy, the G20/OECD Inclusive Framework identified two Pillars, (Pillar One and Pillar Two) as proposals for unified approach in addressing the tax challenges in digital economy. Under Pillar One, three proposals have been articulated to develop a consensus based solution to give taxing right to jurisdiction from which income are earned.

Required Identify these three proposals under Pillar One and briefly explain how they can influence the current taxing right of states.

b) Within the context of the existing taxing rules contained in Double Taxation Agreements to determine a taxable presence of non-resident person in contracting states, briefly explain how each of the following impacts on the current taxing rules contained in the Double Tax Agreements that Ghana entered into with other countries. i. Computer Server ii. Independent Internet Service Provider iii. Website

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  • 20 Marks

IT – Aug 2020 – L1 – Q4 – Tax Treaties and Interpretation

Explain how the UN Model Tax Convention addresses tax discrimination elimination.

a) How does the UN Model Tax Convention deal with the elimination of tax discrimination?

b) “The existence of bearer shares regime and bearer banks accounts in some jurisdictions threatens the standard on exchange of information for tax purposes.”

Required To what extent do bearer shares and bearer banks accounts affect the standard on exchange of information for tax purposes? Are there any benefits to the tax payers?

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  • 20 Marks

IT – Aug 2020 – L1 – Q3 – Business Presence and Characterization

Analyze tax consequences of CPL Group’s technical experts’ activities in Ghana for Mavie Limited.

Mavie Limited is resident entity in Ghana. Mavie Limited was established seven months ago when the Corona Virus 2019 (Covid-19) pandemic began. It sells personal protection equipment (PPE), including medical sanitizer, face and nose masks for self-protection against the infectious disease. The company was jointly owned by Eyra Foundation and Akusa S.A. on 40% and 60% shareholdings respectively. Eyra Foundation is resident in Ghana. Akusa S.A, is a company resident in South Africa and is 100% owned by CPL Group Plc., a multinational company resident in Netherland.

In the last six months, two technical experts from CPL visited Mavie Ltd on 3 months rotation to provide technical support to the staff of Mavie Ltd.

Last month Mavie Ltd declared an interim dividend and subsequently transferred Akusa’s share of the dividend.

The management of Mavie Ltd approached your firm, Emiraldo Consulting to advise them on the implication of the above transactions. You are a Chartered Tax Practitioner in the employment of Emiraldo Consulting and the Managing Partner requests you to draft the advice for Mavie Ltd.

Required Prepare a draft report setting out the tax consequences of

a. Dealings with CPL Group Ltd in Ghana.

b. Payment of dividend to Akusa S.A. by Mavie Limited.

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  • 20 Marks

IT – Aug 2020 – L1 – Q2 – Transfer Pricing Principles

Discuss importance of arm's length principle, its difficulties for MNEs, and alternative approaches.

a) How important is the arm’s length principle in international taxation? Identify two difficulties that it presents for multinational enterprises? Is there a better approach?

b) Eyra MA Limited a resident company in Singapore has several subsidiaries across the globe including Elik EM Engineering Limited in Ghana. Eyra MA Limited provides engineering, procurement and construction management services as its core business. The group’s global value chain include manufacturing, distribution, marketing and sales, research and development, procurement, logistics, financing, administration, after sales service, and human resource management. Eyra MA Limited has an intra-group services policy which stipulates that a holding company provides the services for related entities within the group on the basis that such an arrangement is beneficial to the group as a whole.

Required

i. Explain direct and indirect charging, and provide examples in the context of intra-group services within Eyra MA Limited.

ii. Identify potential chargeable group services, and non-chargeable services within the group structure.

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  • 20 Marks

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.

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

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  • 20 Marks

IT – Feb 2020 – L1 – Q5 – Tax Treaties and Interpretation

Respond to exchange of information requests from South Africa, Netherlands, France, and Italy.

You are a tax official working in the Exchange of Information unit of Ghana Revenue Authority. You have been asked to respond to several enquiries relating to the exchange of information with tax authorities in South Africa, Netherlands, Italy and France.

a. A request came from South African Tax Authority which begins with an observation, from the previous year’s data, that taxpayers in South Africa have often failed to disclose foreign source income. South Africa requests the names of all shareholders in Company X operating from Ghana who are resident in South Africa, and information on any dividends paid to them. Company X has a very popular brand in Ghana and has large shareholders.

b. Mr. Johnson Walker is resident of Netherlands. In the course of an ongoing tax investigation, it has been identified that Mr. Johnson Walker failed to declare her bank accounts with Agricultural Development Bank in Ghana. Netherland also suspects that accounts may have been opened in the name of Mr. Johnson Walker’s daughter, Phyllis. As Phyllis is the daughter of the beneficial owner, Netherland requests information on all accounts with Agricultural Development Bank held in both Mr. Johnson Walker and Ms. Phyllis Walker’s names.

c. Yesterday you reviewed a request for information from the revenue department of France. The file, however, is back on your table today as it has been discovered that a loan application which is subject to such exchange of information contains a secret trade formula.

d. Your junior colleague has just sent you an email, asking you to differentiate between “spontaneous exchange”, exchange of information on request, and automatic exchange of information. He believes that information that has recently been obtained upon request from Italy could be of interest to South Africa Tax Authority. Assume that no exchange of information agreement exists between Italy and South Africa.

Required
What will be your response to each of the requests? State reasons for your responses.

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  • 20 Marks

Feb 2020 – L1 – Q4 – Transfer Pricing Principles

Prepare a transfer pricing report for Grape Resort Ltd to determine arm’s length pricing.

The resort industry at Ada in the Greater Accra region of Ghana is extremely popular with foreign tourists due to the Volta estuary, good weather and the range of leisure activities. These attract investments from multinational companies in the resort business. The multinational enterprises dominate the industry at Ada. The multinational enterprises operate over 90% of the resort industry servicing business clients and other travellers. There are smaller enterprises apart from the multinationals in the resort business. Multinational companies operating in the resort industry make use of central booking companies in low tax jurisdictions. These central booking companies are associated companies of the multinational. The central booking companies advertise the resorts in targeted markets, accept bookings for stay at the resorts and conclude the contracts for stay at the resorts.

A recent study by a Non-Government Organization (NGO) revealed that the multinational enterprises in the resort industry in Ghana reported minimal profits or losses for the last years.

Grape Resort Limited is a Ghanaian registered company whilst CPL Resort Limited is a Cayman Island registered company. Sunrise Pleasure Limited and CPL Resort Limited are 100% owned by the Manna Group S.A, a company resident in Austria.

Grape Resort Limited owns, manages and operates a chain of full service resorts at Ada. CPL Resort Limited advertises the resorts, accepts bookings for stay at the resorts, concludes the contracts and receives payments from clients. Special vouchers are then given to the clients. Clients present the special vouchers to Grape Resort Limited in Ada to access their services. CPL Resort Limited pays fees to Grape Resort Limited from the payment it receives from the clients. Some local and foreign clients book, patronize and pay for the resort services directly at the Grape Resort Limited. Grape Resort Limited is among the multinationals that has reported losses from their operation of resorts in Ghana for the last 5 years.

Required:
Prepare a preliminary Transfer Pricing Report for the management of Grape Resort Limited on how to determine the arm’s length price of their products and services in Ghana based on the information you have at your disposal.

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  • 20 Marks

IT – Feb 2020 – L1 – Q3 – Double Taxation and Relief

Advise Mauritius on double taxation relief for investments in Ghana under proposed DTA.

Mauritius seeks to enter into a Double Taxation Agreement (DTA) with Ghana. From the context of the consultation so far held with Ghana, it is evident that Mauritius intends to negotiate the DTA in order to enable its corporate sector to invest capital in Ghana. Mauritius and Ghana operate worldwide system of taxation, but Ghana has high tax rate than Mauritius.

The Minister of Finance in Mauritius approached Kinsful Tax Practitioners, a Chartered Tax Practitioners, in Ghana to advise Mauritius on the most appropriate method of double taxation relief to be included in the proposed Ghana/Mauritius Double Taxation Agreement as it impacts on portfolio investment, direct share ownership and permanent establishment.

Required
(a). As the Head of Tax at Kinsful Tax Practitioners, prepare a briefing note to the Minister of Finance of Mauritius in which you set out your advice.

(bi). State the process by which a Double Taxation Agreement can be operative in Ghana.

(bii). When interpreting a Double Taxation Agreement (DTA), where a term is not defined in the DTA itself, what should the parties do?

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  • 20 Marks

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

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)

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  • 20 Marks

IT – Feb 2020 – L1 – Q1 – Taxation of Non-Residents

Advise on UK tax liability for payments to a Ghanaian company under Ghana-UK DTA.

Dzoboku Lullaby Limited is a Ghanaian music and orchestral company. Syntax Promotion, a company resident in the United Kingdom, extended an invitation to Dzoboku Lullaby Limited to a musical concert held in London in December, 2019.

Professor Abu, an employee of Dzoboku Lullaby Limited, was billed to perform for Syntax at two separate concerts in London, one at Gustaff Hall and the other at Gibson Hall. The following payments were made to Dzoboku Lullaby Limited by Syntax Promotion:
a. £100,000 for the public performance at the Gustaff Hall.
b. £20,000 for using the Professor’s image to advertise. The payment was deposited into Dzoboku Lullaby Limited’s bank account.
c. £50,000 for the cancellation of Gibson Hall’s event.
d. 2% of the gate proceeds received.
e. 20% of income that accrued from businesses that advertised at the Gustaff Hall event.

Her Majesty Revenue and Customs (HMRC) in the United Kingdom wrote to the Syntax Promotion demanding tax in respect of all incomes paid to Dzoboku Lullaby Limited. Syntax objected to the HMRC request stating that Dzobuku Lullaby Limited has no Permanent Establishment in the United Kingdom and, therefore, cannot be liable for a United Kingdom tax on business income earned by Dzoboku Lullaby Limited since there is a double tax agreement between Ghana and the United Kingdom.

Think Tank Consulting, a firm of Chartered Tax Practitioners in Accra was consulted by Syntax Promotion to advise them on the HMRC demand.

You are a Chartered Tax Practitioner in the employment of Think Tank Consulting and Syntax request was referred to you to deal with by your Managing Partner.

Required
Prepare a briefing note to the Managing Partner of Think Tank Consulting in which you set out clearly, with reasons, whether United Kingdom’s tax is due on each of the payments made to Dzoboku Lullaby Company Limited as demanded by the HMRC.

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  • 20 Marks

IT – Aug 2020 – L1 – Q5 – E-Commerce and International Tax Challenges

Identify and explain three Pillar One proposals for taxing rights in the digital economy.

a) In the policy note to address the tax challenges of the digitalization of the economy, the G20/OECD Inclusive Framework identified two Pillars, (Pillar One and Pillar Two) as proposals for unified approach in addressing the tax challenges in digital economy. Under Pillar One, three proposals have been articulated to develop a consensus based solution to give taxing right to jurisdiction from which income are earned.

Required Identify these three proposals under Pillar One and briefly explain how they can influence the current taxing right of states.

b) Within the context of the existing taxing rules contained in Double Taxation Agreements to determine a taxable presence of non-resident person in contracting states, briefly explain how each of the following impacts on the current taxing rules contained in the Double Tax Agreements that Ghana entered into with other countries. i. Computer Server ii. Independent Internet Service Provider iii. Website

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  • 20 Marks

IT – Aug 2020 – L1 – Q4 – Tax Treaties and Interpretation

Explain how the UN Model Tax Convention addresses tax discrimination elimination.

a) How does the UN Model Tax Convention deal with the elimination of tax discrimination?

b) “The existence of bearer shares regime and bearer banks accounts in some jurisdictions threatens the standard on exchange of information for tax purposes.”

Required To what extent do bearer shares and bearer banks accounts affect the standard on exchange of information for tax purposes? Are there any benefits to the tax payers?

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  • 20 Marks

IT – Aug 2020 – L1 – Q3 – Business Presence and Characterization

Analyze tax consequences of CPL Group’s technical experts’ activities in Ghana for Mavie Limited.

Mavie Limited is resident entity in Ghana. Mavie Limited was established seven months ago when the Corona Virus 2019 (Covid-19) pandemic began. It sells personal protection equipment (PPE), including medical sanitizer, face and nose masks for self-protection against the infectious disease. The company was jointly owned by Eyra Foundation and Akusa S.A. on 40% and 60% shareholdings respectively. Eyra Foundation is resident in Ghana. Akusa S.A, is a company resident in South Africa and is 100% owned by CPL Group Plc., a multinational company resident in Netherland.

In the last six months, two technical experts from CPL visited Mavie Ltd on 3 months rotation to provide technical support to the staff of Mavie Ltd.

Last month Mavie Ltd declared an interim dividend and subsequently transferred Akusa’s share of the dividend.

The management of Mavie Ltd approached your firm, Emiraldo Consulting to advise them on the implication of the above transactions. You are a Chartered Tax Practitioner in the employment of Emiraldo Consulting and the Managing Partner requests you to draft the advice for Mavie Ltd.

Required Prepare a draft report setting out the tax consequences of

a. Dealings with CPL Group Ltd in Ghana.

b. Payment of dividend to Akusa S.A. by Mavie Limited.

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  • 20 Marks

IT – Aug 2020 – L1 – Q2 – Transfer Pricing Principles

Discuss importance of arm's length principle, its difficulties for MNEs, and alternative approaches.

a) How important is the arm’s length principle in international taxation? Identify two difficulties that it presents for multinational enterprises? Is there a better approach?

b) Eyra MA Limited a resident company in Singapore has several subsidiaries across the globe including Elik EM Engineering Limited in Ghana. Eyra MA Limited provides engineering, procurement and construction management services as its core business. The group’s global value chain include manufacturing, distribution, marketing and sales, research and development, procurement, logistics, financing, administration, after sales service, and human resource management. Eyra MA Limited has an intra-group services policy which stipulates that a holding company provides the services for related entities within the group on the basis that such an arrangement is beneficial to the group as a whole.

Required

i. Explain direct and indirect charging, and provide examples in the context of intra-group services within Eyra MA Limited.

ii. Identify potential chargeable group services, and non-chargeable services within the group structure.

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  • 20 Marks

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.

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

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