Double Taxation and Relief

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

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

Question

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

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

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

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

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

Answer

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

Topic: Double Taxation and Relief
Series: FEB 2020

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

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

Question

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.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Article 18, Double Taxation Agreement, Ghana Tax, Non-resident taxation, Permanent Establishment, Royalties, UK Tax
Level: Level 1

Topic: Double Taxation and Relief
Series: FEB 2020

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

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

Question

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.

Answer

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Tags: Beneficial Ownership, Dividend taxation, Double Taxation Agreement, Permanent Establishment
Level: Level 1

Topic: Double Taxation and Relief
Series: AUGUST 2020

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

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

Question

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

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

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

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

Required:

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

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

Answer

Find Related Questions by Tags, levels, etc.

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

Topic: Double Taxation and Relief
Series: AUGUST 2020

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

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

Question

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

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

Answer

Find Related Questions by Tags, levels, etc.

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

Topic: Double Taxation and Relief
Series: FEB 2020

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

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

Question

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.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Article 18, Double Taxation Agreement, Ghana Tax, Non-resident taxation, Permanent Establishment, Royalties, UK Tax
Level: Level 1

Topic: Double Taxation and Relief
Series: FEB 2020

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

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

Question

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.

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.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Beneficial Ownership, Dividend taxation, Double Taxation Agreement, Permanent Establishment
Level: Level 1

Topic: Double Taxation and Relief
Series: AUGUST 2020

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

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

Question

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

Required:

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

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

Answer

Find Related Questions by Tags, levels, etc.

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

Topic: Double Taxation and Relief
Series: AUGUST 2020

Topic: Double Taxation and Relief

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

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

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

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

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

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

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

You're reporting an error for "IT – Feb 2020 – L1 – Q1 – Taxation of Non-Residents"

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

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

You're reporting an error for "IT – Aug 2020 – L1 – Q3 – Business Presence and Characterization"

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

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

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

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