Pleasant Place Plc is contemplating as to whether to invest in the Hotel or Tourism business. The Chairman of the Company has approached you this morning for assistance on the tax implications with respect to the two businesses for his final decision. The projected results of the two companies are likely to be the same in the first year. The companies’ projected income and expenditure for year 1 is as follows: ABS LTD (HOTEL) CDS LTD (TOURISM) GHC GHC Gross Profit 1,000,000 1,000,000 Expenditure 670,000 670,000 Additional Relevant Information: A building to be bought on 1 March of Year 1 for GHC 400,000 has been granted full year’s depreciation at the rate of 20% and the same amount has been added to the projected cost above. Required: As a postgraduate student in taxation at the Accra Business School, write a briefing note to advise the Chairman on what business to invest in, with the necessary appendix.
QUESTION 1: Pleasant Place Plc is contemplating as to whether to invest in the Hotel or Tourism business. The Chairman of the Company has approached you this morning for assistance on the tax implications with respect to the two businesses for his final decision.
The projected results of the two companies are likely to be the same in the first year.
The companies’ projected income and expenditure for year 1 is as follows:
ABS LTD (HOTEL) CDS LTD (TOURISM)
GHC GHC
Gross Profit 1,000,000 1,000,000
Expenditure 670,000 670,000
Additional Relevant Information:
A building to be bought on 1 March of Year 1 for GHC 400,000 has been granted full year’s
Required:
As a postgraduate student in
QUESTION 2: Tax planning is the act of arranging one’s tax affairs in ways that postpone or avoid taxes. By employing effective tax planning variables, one can have more positive
Required:
Explain what constitutes the variables of tax planning
QUESTION 3: The Government of Ghana has been worried by the rising incidence of Transfer Pricing abuses by Multinational and Group Companies. For this reason, it introduced new transfer pricing rules and guidelines through the Transfer Pricing Regulations, 2012 (LI 2188).
Required:
a. Explain any four (4) objectives of the transfer pricing regulations of Ghana
b. Explain the arm’s length principle
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