Anda di halaman 1dari 5

1|Page 12/27/2013 Submitted By: Ahmed Siddiqui (11022). Arsalan Yar Khan (24955). Syed Hamayun jamal (21753).

Kiran Yameen (25037). Muhammad Umair Khan (13354). Shoaib Nawaz Shaikh (25361).

TAXATION PROJECT

PAK SUZUKI MOTOR COMPANY LTD.

Submitted To: Mr. Intisar Usmani Day & Time Saturday 6:30-9:00

Pak Suzuki Motor Company Ltd Tax Assessment Order For the Tax year 2012 Amount in Rs (000)

Particular Profit before Taxation Add Inadmissible Expense Accounting Depreciation Accounting Amortization Provision for Doubtful debts Donation

Notes 1499760 N-1 N-2 N-3 N-4 N-5 9276662 193530 496 000 9470688 10970448

Profit after the adjustment of inadmissible expense

Less Admissible Expense Tax Depreciation Tax Amortization Taxable Income Tax @ 40% Profit after Tax

N-7 N-8 N-9 2995113 168510 (3163623) 7806825 (3122730) 4684095

Notes:
N-1: The expenses or payments which are not allowed under income tax ordinance shall be add back in the profit or loss before tax computed by following the accounting principles. N-2: Accounting depreciation is not allowed as tax deduction. For this project we add back the amount of accumulated depreciation in the profit before taxation because if we include the accounting depreciation expense than it converts firms profit in to loss. Because we are assuming this is the first year of operations for the company. However the amount of accounting accumulated depreciation and depreciation expense are shown below. Assets Leasehold Land Freehold land Factory Office Test Tracks and Other Buildings Plant and Machinery Wielding Guns WWT Plant Tools Dies Jigs Electrical Installations Furniture and Fitting Vehicles A/C & Refrigerator Office Equipment Computers Total Accumulated Depreciation 70546 35015 805657 3248 12538 5014372 252379 104718 371316 1555752 436644 138730 10505 268862 15902 53730 126748 9276662 Depreciation Expense 10365 706 53282 437 241 419856 12127 6911 11121 163685 15528 19678 1090 72168 1303 5586 17977 812061

N-3: Accounting Amortization is not allowed for the purpose to calculate taxable income. We applied same approach which was applied to calculate tax depreciation for same reason. The amount of accounting accumulated amortization and amortization expense are shown below. Intangible Assets License Fees Software Total Accumulated Amortization 189054 4449 193503 Amortization Expense 190765 3661 194426

N-4: Any provision for doubtful debts is not allowed under income tax ordinance therefore we add back the amount of provision for doubtful debts in accounting profit before taxation.

N-5: Under income tax ordinance any donation to approved institution is not allowed as direct deduction. However tax credit is allowed under income tax ordinance. N-6: The expenses or payments which are allowed under income tax ordinance shall be deducted from the profit or loss before tax computed by following the accounting principles. N-7 Tax depreciation is calculated as follows. Assets Leasehold Land Freehold land Factory Office Test Tracks and Other Buildings Plant and Machinery Wielding Guns WWT Plant Tools Dies Jigs Electrical Installations Furniture and Fitting Vehicles A/C & Refrigerator Office Equipment Computers Total Un adj WDV 521427 371514 467903 2154 965 1264576 30583 15506 21522 496275 76989 68058 4815 312513 7226 24946 25077 Acc Dep 70546 35015 805657 3248 12538 5014372 252379 104718 371316 1555752 436644 138730 10505 268862 15902 53730 126748 Cost of Assets 591973 406529 1273560 5402 13503 6278948 282962 120224 392838 2052027 513633 206788 15320 581375 23128 78676 151825 Initial Allowance 318390 1351 3376 1569737 3830 Depreciation 95517 405 1013 470921 28296 12022 39284 205203 51363 20679 1724 116275 2313 7868 45548 Deprecation for the year 413907 1756 4388 2040658 28296 12022 39284 205203 51363 20679 5554 116275 2313 7868 45548 2995113

Assets Buildings Plant & Machinery Furniture & Fittings Office Equipment Vehicles Computer

Initial allowance Rate 25% 25% 25% -

Tax Rate 10% 10% 15% 10% 20% 30%

*Depreciation on any type of land is not allowed under income tax ordinance.

N-8: Tax Amortization is calculated as follows. Intangible Assets License Fee Software Total Un Adj WDV 293210 18818 Acc Amortization 189054 4449 Cost of Assets 482264 23267 Amortization Amortization for the year 160755 160755 7755 7755 168510

Amortization expense = Cost of intangible Assets / Life in years. *if life is more than 10 year than it should be divided by 10 years according to income tax ordinance otherwise company policy should be followed. * Pak Suzuki intangible assets life is equal to 3 years.