TAX PLANNING AND PRACTICES

Summary of Marking Key

Certified Finance and Accounting Professional Examination – Summer 2023

Note regarding marking scheme:

The marking scheme is given as a guide. However, markers also award marks for alternative
approaches to a question and relevant/well-reasoned comments/explanations. Moreover, the
available marks in answer may exceed the total marks of a question.

Mark(s)
A.1 Option 1:
 Income from business
– Allowable expenses 3.5
– Apportionment of expenses between income subject to NTR and income
subject to FTR 2.0
– Thin capitalization 2.5
 Income from property 2.0
 Tax liability 2.0
 Tax credit 2.0
 Non-application of alternate corporate tax and minimum tax 1.5
Option 2:
 Tax liability 2.5
 Tax credit 2.0

A.2 (a) In respect of all of the given four companies:

 Determine the eligibility for a 100% tax credit 6.0
 Evaluate whether the surplus funds are liable to a 10% tax or not 2.0
 Compute tax liability with regard to eligible income for tax credit 4.0
 Compute tax liability with regard to dividend income 1.0

(b)  Discuss geographical source of income 2.0

 Discuss recharacterisation of income by the Commissioner 2.0
 Conclusion 1.0

A.3  Loan provided to CEO 2.0

 Sales to unregistered dealer 5.0
 Gain on sale of showroom 4.0
 Interest income and loss on sale of government debt securities 3.0
 Gain on sale of unlisted securities 2.0
 Accounting and tax depreciation 1.0
 Brought forward business losses and unabsorbed tax depreciation 5.0

A.4 Chargeability of sales tax in respect of:

 Transaction (i) 4.0
 Transaction (ii) 2.0
 Transaction (iii) 1.0

A.5  Input duty 3.0

 Output duty 3.0
 Inadmissible duty (related to exempt supplies) 1.0
 Duty drawback (related to exports) 1.0

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 TAX PLANNING AND PRACTICES
Summary of Marking Key
Certified Finance and Accounting Professional Examination – Summer 2023

Mark(s)
A.6  Input tax 9.0
 Output tax 5.0
 Apportionment of input tax 2.0
 Sales tax payable / refundable 4.0

A.7  Identification of fundamental principles 2.0

 Evaluation of fundamental principles 3.0

(THE END)

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