Tax Strategies for New Business Formation

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

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

Question

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

Answer

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

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

STP – Aug 2020 – L2 – Q2 – Corporate Restructuring

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

Question

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

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

Answer

Find Related Questions by Tags, levels, etc.

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

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

STP – Aug 2018 – L2 – Q4 – Tax Strategies for New Business Formation

Discuss tax implications of establishing a subsidiary, partnership, or branch for Urok Group in Ghana.

Question

(a). The majority shareholder and President of Urok Group of Companies intends to expand his business activities into West Africa. His initial enquiries show that Ghana is a suitable country for his investment. The investor has been informed that there are different tax treatments for the various forms of business organisations in Ghana. As a renowned tax consultant, the investor seeks your expert opinion on the tax implications of establishing following forms of business organisations:

I. A wholly subsidiary company (5 marks)

II. A Partnership (5 marks)

III. A Branch (5 marks)

(b). Which of the above forms of business organisations gives the least tax exposure on the investment Urok Group of Companies intends to make in Ghana.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business Organizations, Partnership, Tax Efficiency, Tax Exposure
Level: Level 2

Topic: Tax Strategies for New Business Formation
Series: AUG 2018

STP – Feb 2020 – L2 – Q2 – Tax Implications of Financing Options

Advise on tax implications of financing a plant purchase as equity or loan for red flow Ghana Limited.

Question

Red flow Ghana Limited is a manufacturing entity in Ghana. Mr. Kurt Wildem, a citizen and resident of Germany owns 90% of the company’s shares. Mrs. Florence Wildem, a citizen and resident of Germany and wife of Mr. Wildem also owns 5% of the shares of the company. Mr. Jogen Wildem, the son of Mr. Kurt Wildem holds the remaining 5% of the shares in the company. As of 1st June 2019, the company had a stated capital of GH¢400,000.00. A report submitted by the management to the Board of Directors indicated that the company needs to acquire a plant valued at GH¢1,000,000.00 to enable the company to increase its production capacity. Mr. Kurt Wildem who is the majority shareholder has offered to finance the purchase of a plant for the company, but his challenge is whether to provide the asset to the company as a loan or as equity.

Required: Advise Mr. Kurt Wildem on i. the income tax treatment of providing the asset to the company as equity contribution. (7 marks) ii. the income tax treatment of providing the asset to the company as a loan. (7 marks) iii. the preferable option for providing the asset to the company in order to derive the maximum tax benefits.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Corporate Tax, Dividend taxation, Equity contribution, Loan financing, Tax deductions, Withholding Tax
Level: Level 2

Topic: Tax Strategies for New Business Formation, Taxation and Operating Strategies in Business
Series: FEB 2020

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

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

Question

Answer

Find Related Questions by Tags, levels, etc.

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

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

STP – Aug 2020 – L2 – Q2 – Corporate Restructuring

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

Question

Answer

Find Related Questions by Tags, levels, etc.

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

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

STP – Aug 2018 – L2 – Q4 – Tax Strategies for New Business Formation

Discuss tax implications of establishing a subsidiary, partnership, or branch for Urok Group in Ghana.

Question

I. A wholly subsidiary company (5 marks)

II. A Partnership (5 marks)

III. A Branch (5 marks)

(b). Which of the above forms of business organisations gives the least tax exposure on the investment Urok Group of Companies intends to make in Ghana.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business Organizations, Partnership, Tax Efficiency, Tax Exposure
Level: Level 2

Topic: Tax Strategies for New Business Formation
Series: AUG 2018

STP – Feb 2020 – L2 – Q2 – Tax Implications of Financing Options

Advise on tax implications of financing a plant purchase as equity or loan for red flow Ghana Limited.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Corporate Tax, Dividend taxation, Equity contribution, Loan financing, Tax deductions, Withholding Tax
Level: Level 2

Topic: Tax Strategies for New Business Formation, Taxation and Operating Strategies in Business
Series: FEB 2020

Topic: Tax Strategies for New Business Formation

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

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

STP – Aug 2020 – L2 – Q2 – Corporate Restructuring

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

STP – Aug 2018 – L2 – Q4 – Tax Strategies for New Business Formation

Discuss tax implications of establishing a subsidiary, partnership, or branch for Urok Group in Ghana.

STP – Feb 2020 – L2 – Q2 – Tax Implications of Financing Options

Advise on tax implications of financing a plant purchase as equity or loan for red flow Ghana Limited.

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

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

STP – Aug 2020 – L2 – Q2 – Corporate Restructuring

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

STP – Aug 2018 – L2 – Q4 – Tax Strategies for New Business Formation

Discuss tax implications of establishing a subsidiary, partnership, or branch for Urok Group in Ghana.

STP – Feb 2020 – L2 – Q2 – Tax Implications of Financing Options

Advise on tax implications of financing a plant purchase as equity or loan for red flow Ghana Limited.

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

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

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STP – Aug 2020 – L2 – Q2 – Corporate Restructuring

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

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

STP – Aug 2018 – L2 – Q4 – Tax Strategies for New Business Formation

Discuss tax implications of establishing a subsidiary, partnership, or branch for Urok Group in Ghana.

You're reporting an error for "STP – Aug 2018 – L2 – Q4 – Tax Strategies for New Business Formation"

STP – Feb 2020 – L2 – Q2 – Tax Implications of Financing Options

Advise on tax implications of financing a plant purchase as equity or loan for red flow Ghana Limited.

You're reporting an error for "STP – Feb 2020 – L2 – Q2 – Tax Implications of Financing Options"

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

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

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

STP – Aug 2020 – L2 – Q2 – Corporate Restructuring

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

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

STP – Aug 2018 – L2 – Q4 – Tax Strategies for New Business Formation

Discuss tax implications of establishing a subsidiary, partnership, or branch for Urok Group in Ghana.

You're reporting an error for "STP – Aug 2018 – L2 – Q4 – Tax Strategies for New Business Formation"

STP – Feb 2020 – L2 – Q2 – Tax Implications of Financing Options

Advise on tax implications of financing a plant purchase as equity or loan for red flow Ghana Limited.

You're reporting an error for "STP – Feb 2020 – L2 – Q2 – Tax Implications of Financing Options"

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