Anda di halaman 1dari 13

Mock 1

Taxation
(Russia)
F6TX(Rus)-MK1-X13-A
Answers & Marking Scheme

2013DeVry/BeckerEducationalDevelopmentCorp.

ZAO ROLEX RUSSIA

(a)

Profits tax liability of ZAO Rolex Russia


RR*

Marks

27,000,000
0

(13,174,067)
(1,028,585)

3
2

(300,000)
(1,960,000)
(588,000)
(130,000)
(39,000)
0
(48,000)
(1,528,986)
(682,423)
(152,542)
(360,000)
(21,600)
(125,400)
(250,800)
(1,180,000)
_________

2
4
1

3
1
1

Sales income (Note 1)


Prepayments
Expenses
Direct expenses
Cost of goods sold (Note 2)
Transportation costs (Note 3)
Indirect expenses
Property insurance
Wages and salaries
SIC on wages and salaries (1,960,000 30%)
Free meals (provided in the contract)
SIC on free meals (130,000 30%)
Sports membership
SIC on sports membership (160,000 30%)
Interest expense (Note 4)
Depreciation of cars and mini-vans (Note 5)
30% write-off on cars (Note 5)
10% write-off on building (Note 6)
Depreciation of the building (Note 6)
Medical insurance (Note 7)
Pension insurance (Note 7)
Bad debt expense (including VAT)
Total direct and indirect expenses:

(21,569,403)
_________

Taxable profits before loss


Loss (2012 tax loss)

5,430,597
4,000,000
_________

Taxable profits after loss


Tax accrued at 20%

1,430,597
286,119

___
25
___

* Note that the question permits that figures be rounded to nearest 000 RR.
Marks for workings not to be double-counted.
Note 1

Sales revenue

Under the accruals method prepayments received from customers are not recognised until the
goods are dispatched.
()
Sales are taken VAT net: (31,860,000 100/118)
27,000,000
()

2013DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.

version 1

Note 2

Cost of goods sold

Model # 1: ((35 68,000) + (25 56,800))


Model # 2: ((90 35,400) + (70 32,400) + (20 24,000))
Model # 3: ((30 34,400) + (50 32,800))
Bracelets: (140 3,100) 100/118
Boxes: (((300 1,480) 100/118) + (20 1,200))

RR
3,800,000
5,934,000
2,672,000
367,796
400,271
_________

()
(1)
()
()
(1)
___

Total cost of goods sold

13,174,067
_________

3
___

1,520,000

()

19,468,095

(1)

Note 3

Allocation of direct transportation costs

Total transportation costs:


(500,000 + (1,203,600 100/118))
Total goods available for sale:
(4,798,000 + 13,768,400 + (1,064,000 100/118))
Deductible transportation costs =

Cost of goods sold


Total transportation costs
Total goods available

= (13,174,067/19,468,095) 1,520,000

1,028,585

()
___
2
___

Note 4

Interest expense
520,767

()
(1)

1,008,219
________

()
()
___

1,528,986
________

2
___

Purchase cost of cars (net of VAT): (300,000 2 100/118)


30% immediate write-off (given in January 2013)

508,475
152,542
_______

()
()

NBV on 1 January 2013

355,933
_______

Number of days 15 June 30 September: (16 + 31 + 31 + 30) = 108


(20 million 8% 1.1 108/365)
Number of days 1 October 31 December: (31 + 30 + 31) = 92
(20 million 20% 92/365)
Total deductible interest

Note 5

30% write-off and depreciation of cars and mini-vans

ars

2013DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.

version 1

Mini-vans
Purchase cost (net of VAT): (885,000 3 100/118)
30% immediate write-off (utilised in 2012)

2,250,000
675,000
________

()
()

Depreciable cost:
Depreciation: (1,575,000 4/(5.5 12))

1,575,000
95,455
________

(1)

NBV on 1 January 2013

1,479,545
________

Total NBV on 1 January 2013 (355,933 + 1,479,545)


NBV on 31 December 2013 (1,835,478 (1 0.01 3.8)12)

1,835,478
1,153,055
________

()
(1)

Depreciation for 2013

682,423
________

()

Markers note: 5 marks are allocated 1 mark to 30% current year write-off on car and 4
year to current year depreciation charge.
Note 6

10% write-off and depreciation expense on building

Building cost
Wages and salaries
SIC at 30%
Materials (net of VAT)
Services
Interest (indirect expense for CPT purposes is not capitalised)

1,200,000
360,000
1,400,000
640,000
0
________

()
()
()
()

Total cost
10% immediate write-off
Depreciation for buildings from 8-10 groups is
calculated only according to straight-line method.

3,600,000
360,000

()

Depreciable cost
Depreciation: (3,240,000 2/(12 25))

________
3,240,000
________

()

21,600

()

Markers note: 3 marks are allocated mark to 10% current year write-off (for method)
and 3 for current year depreciation charge.
Note 7

Employees insurance

Deductible limits for insurance are calculated based on deductible labour costs which include
salaries and free meals (1,960,000 + 130,000)
2,090,000
()
Medical insurance is limited to (6% 2,090,000)
125,400
()
(minimum term of agreement is 1 year).
Pension insurance is limited by (12% 2,090,000)
250,800
(1)
(the fact that insurance is provided for senior management only is irrelevant for tax)

2013DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.

version 1

(b)

VAT liability

RR

Calculation

Marks

Output VAT
On sales
On prepayment as at 31 December

4,860,000
1,080,000

On capital construction

861,041
________

Total output VAT

6,801,041
________

7,080,000 18/118

Note 8

13,768,400 18%
1,203,600 18/118 85%
1,064,000 18/118 90%

1
1

Input VAT
On prepayments as at 1 January
Paid at customs
On transportation
On boxes and bracelets

(360,000)
(2,478,312)
(156,060)
(146,075)

Recovery of self-assessed VAT on


capital construction

(861,041 )
(252,000)

1,652,000 18/118

On services for capital construction

(115,200)
_________

775,200 18/118

Total input VAT

(4,368,688)
_________

___

2,432,353

On materials for capital


construction

VAT payable/(recoverable)
Note 8

VAT on capital construction

Tax cost of the building (per Note 6)


Plus: accounting interest for 15 June 30 September:
(20 million 108/365 20%)

3,600,000
1,183,562
________

(1)

Total
VAT at 18%

4,783,562
861,041

()

Markers note: No additional marks should be given for tax cost of building if marks
already awarded in depreciation section (Note 6). However if marks have not been
previously awarded, then award in this part.

2013DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.

version 1

REUTORS

(a)

Personal income tax liability of Viktor for 2013 withheld by Reutors

Income tax at 13%


Gross salary accrued: (12,000 + (11 50,000))
Less:
Standard children allowance (January June) (6 1,400)
Salary exceeds 280,000 RR after 6 months:
(12,000 + 3,000 + (5 (50,000 + 3,000))

562,000

Gross salary less deductions


Bonus income (received net) (50,000/0.87)
Free lunches
Gift income (10,000 + 4,000)
Less: gift deduction

553,600
57,471
36,000

(8,400)

(1)
(1)

______

14,000
(4,000)
______

Taxable gift amount


Medical insurance

10,000
0
______

Total income subject to 13% rate withholding

657,071
______

()
()
(1)
()
()

85,419

()

Imputed interest on loan to buy an apartment (Note 1)


Imputed interest on loan to buy a car (Note 1)

0
10,918
______

()
(2)

PIT at 35% withheld by employer

3,821
______

()
___

Tax withheld

Income tax at 35%

9
___
Note 1

Imputed interest on loans

1st loan (2 million RR)


Interest on the loan spent on financing of an apartment is not subject to PIT. Interest is added
to housing incentive deduction.
()

2nd loan (500,000 RR)


Tutorial note: Interest is subject to PIT as the loan was taken to finance a purchase of a car.
PIT is calculated only on the dates of actual payment of interest.
Imputed interest:
2 July 30 September: (500,000 ((2/3 8%) 5%) 91/365)
1 October 31 December: (500,000 ((2/3 20%) 5%) 92/365)
Total imputed interest

(1)
(1)

10,918
______

()

Imputed interest is subject to tax at 35%.

2013DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.

416
10,512
______

version 1

(b)

Final settlement of Viktors personal tax liability

Income subject to 35% rate


RR
Taxable interest on $ deposit:
Number of days (29 + 31 + 30) = 90
(10,000 USD (16% 9%) 90/365 33.5)
Imputed interest on loan (per (a))
Gift from BMI
Less: exempt amount on gift

5,782
10,918
62,000
(4,000)
______

()
(1)
()
()
()

Total income subject to 35%

74,700
______

Tax at 35%

26,145

()

(3,821)
(2,024)
0
______

()
()
()
__

Tax withheld:
On loan
On deposit (5,782 35%)
On gift (no withholding on non-employment income in-kind)
PIT liability at 35%

20,300
______

657,071
2,000
0

()
()

50,000

(1)

Income subject to regular rate and corresponding deductions


Income from Reutors taxed at 13% rate (per (a))
Insurance income on damaged car (18,000 12,000 4,000)
Gain on car sale
(owned for more than 3 years)
Gain on sale of summerhouse
((1,200,000 ) (1,000,000 ))
Total income subject to 13%:
(before social deductions and housing incentive)

_______
709,071

(120,000)

(2)

Educational deduction for son

(45,000)
________

()

Total income subject to 13%:


(before housing incentive)
Housing incentive (Note 3)

544,071

Social deductions (Note 2)

(544,071)
_______

13% rate income after deductions


Total tax at 13% rate
Less tax withheld by Reutors at source

0
0
(85,419)
_______

Tax refund at 13% rate

(85,419)
_______

Total tax refund (85,419 20,300)

65,119
_______

(3)**

()

()
____
(14)
__

** Includes 1 mark for stating the carry forward to future years (see Note 3).

2013DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.

version 1

Tutorial note: Social deductions are applied before housing incentive as they cannot be
carried forward.
Note 2 Social deductions
70,000

(1)

38,000
12,000
_______

()
()

120,000
_______

()

2,000,000
66,849
________

()
(1)

2,066,849
544,071
________

()

1,522,778
________

(1)

Taxable profits
CPT at 20%

78,000,000
(15,600,000)
_________

()

Profits after tax

62,400,000
_________

Medical deduction (64,000 + 6,000)


(can only be taken with respect to Viktors children and parents)
Educational deduction (own)
Pension payments (restricted)
Total maximum social deductions

Note 3 Housing incentive


Housing incentive
Main
Interest (2 million 5% 244/365)
Total housing incentive
Maximum can be used in 2013
(total income subject to 13% after social deductions)
Housing incentive carried forward:

ZAO STRAUS

(a)(i)

Andrei

Profits for distribution (70%)


Less: interim dividends received

43,680,000
(10,000,000)
_________

Taxable dividends
Total PIT at 9%
Andreis share (%) 810 2,700 = 30%

33,680,000
3,031,200

Andreis taxable dividend income: (33,680,000 30%)

10,104,000

()

13,104,000
909,360
_________

()
()
___

12,194,640
_________

4
___

Net amount received:


(43,680,000 30%)
PIT (30% 3,031,200)

(ii)

()
()
()
()

Deadlines
Declaration is to be submitted on 30 April 2014.
PIT payment deadline is 15 July 2014.

2013DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.

()
()

version 1

(b)

Pavel copyright fee

PIT
RR

x
(x 0.2x) 0.13

Gross income
Less: PIT

(1)

__________

Net income received

450,000
__________

Solving: x 0.8x 0.13 = 450,000


Gives: x
Tax (502,232 0.8) 13%

502,232
52,232

()
()

502,232
(100,446)
______

()

SIC
Gross income
Less: professional deduction 20%
Amount subject to SIC

401,786
______

SIC is taken at special rates for copyright agreements:


(401,786 27.1%)

108,884
______

()
__
3
__

(c)

Anna - business trip


Annas PIT base for the 1st quarter 2013
Gross salary (104,400/0.87 3)
Transfer to/from the airport and hotels
Taxi (270 160) 42.5
Per diem allowance (Note 1)

360,000
0
4,675
1,800
______

Tax base
PIT withheld by Delta at 13%

366,475
47,642

()
()
()
(1)
()
__
3
__

Note 1
Reimbursement
Spent for taxi and hotels (270 + 280 + 300) EUR 42.5

48,625
36,125
______

()

Per diem allowance


Non-taxable per diem allowance ((2,500 4) + 700))

12,500
10,700
______

()

Taxable per diem allowance

1,800
______

2013DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.

version 1

(d)

Anna Rouble deposit


RR
Actual % 15 April 15 December = 244* days
(120,000 30% 244/365)
Statutory %:
15 30 April = 15* days
(120,000 (15% + 5%) 15/365)
1 May 30 September = 153 days
(120,000 (8% + 5%) 153/365)
1 October 15 December = 76 days
(120,000 (20% + 5%) 76/365)
Total taxable interest

24,066

(1)

(986)

(1)

(6,539)

(1)

(6,247)
______

(1)
__

10,294
______

4
__

* 1st day (15 April) is excluded from number of days.


4

AO MARS AND ZAO PENA

(a)(i)

Quarterly VAT liabilities

Return for December 2012 VAT on advance payment


Mars will have no VAT liability in December 2012 as VAT on advance payments for export
is not paid.
(1)

Amended VAT return for the 1st quarter 2013 VAT on unconfirmed export
On 9 July Mars will have to recognise the standard rate VAT base on the shipment:
(4,400 EUR 30.6)
134,640 RR

()
(1)

Tutorial note: The exchange rate is taken at the customs clearance date.
Output VAT (134,640 18%)
Input VAT recovery

RR
24,235
(15,840)
______

()
()

VAT payable to the budget

8,395
______

()

Tax return for 4th quarter 2013 VAT on confirmed export


Zero rate VAT base is determined on 31 December 2013 (the last day of a tax period in which
documents were submitted).
()
RR
Output VAT (4,400 EUR 33.35 = 146,740 RR) @ 0%
Recovery of VAT previously paid to the budget

0
(24,235)
______

(1)
(1)

VAT due for refund is

(24,235)
______

()

Markers note: Award only 1 mark if make-up of refund is not shown.

2013DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.

10

version 1

(a)(ii)

Unconfirmed export

()
()

VAT declaration for the 1st quarter must be amended.


Penalty starts from 21 April and stops on 31 July.
RR
14
15
46
92
____

8,395 1/3 10 1/300 15%


8,395 1/3 20 1/300 8%
8,395 1/3 31 1/300 8%
8,395 1/3 41 1/300 8%

()
()
()
()

167
____
(b)

ZAO Pena

Output VAT
RR 000
1,800
108
162
____

()
()
(1)

2,070
____

()

On 2013 purchases of goods (8,260 18/118)


Recovery on prepayments as at 1 January
Returned goods (118,000 18/118)
Claw back (1,770,000 18/118)

(1,260)
(144)
(18)
270
____

()
()
()
()

Total input VAT

(1,152)
____

On 2013 sales
Assessed on new prepayments
On car transfer (1,062,000 18/118)
Total

Input VAT

VAT liability

2013DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.

918

11

()

version 1

COMPANY ALFA

(a)

Interest deductible for corporate profits tax purposes

Loan received from Company B


Test for thin capitalisation rules: since Company B is foreign company and it owns more than
20% share in Alfa, the loan from Company B is a controlled loan. The other criteria to be
checked is loan amount > net assets of Alfa by 3 times at the end of the reporting period (i.e.
2nd quarter 2013).
(1)
Principal amount of debt 270,000 EUR
Principal debt at 30 June 2013 (270,000 41.5)
Number of days for interest (30 + 31 + 30) = 91
Actual accrued interest (11,205,000 25% 91/365)

RR
11,205,000
698,394

()
()
(1)

_________
Total controlled debt at 30 June 2013
Own capital (12,000,000 (10,030,000 80,000))
Own capital 3
Thin capitalisation test
Thin capitalisation ratio (11,903,394/(6,150,000 30%)

11,903,394
2,050,000
6,150,000
11,903,394 > 6,150,000
6.45

()
()
(1)

Since the interest rate is more than 15% limit for currency loans, the deduction of interest is
limited to:
()
11,205,000 (15% 91/365)/6.45

64,967

(1)

Loan from Company C


Company C is a controlled affiliate of Germany Company D which indirectly owns a share in
Alfa 0.7 0.4 = 0.28 > 20%, so the thin capitalisation rules should be applied. But again the
second condition needs to be checked.
(1)
Principal amount of debt

5,000,000

Number of days for interest (29 + 30) = 59


Accrued interest (5,000,000 35% 59/365)

282,877
________

Total controlled debt at 30 June 2013

5,282,877

()
()

5,282,877 < 6,150,000

()

The second condition is not met, so the thin capitalisation rules do not apply.
Since the interest rate is more than CBR rate 1.1 limit the interest is limited to 8.8%.

()

Thin capitalisation test

5,000,000 8.8% 59/365


Total deductible interest (64,967 + 71,123)

71,123

()

136,090

()
___
11
___

2013DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.

12

version 1

(b)

Tax on deemed dividend

Company B
Deemed dividend (698,394 64,967)
Tax on deemed dividend (633,427 0.15)

633,427
95,014

()
()

Company C
(1)
__

There are no deemed dividends, as it is not a controlled loan.

2
__
(c)

Withholding tax
Although Company C has owned Alfa for more than one year it owns only 30% in Alfa, so
Alfa should withhold tax on dividends.
(1)

()

As Company C is Russian Company, the tax rate is 9%.


(3,000,000 40% 9%)

108,000 RR

()
__
2
__

2013DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.

13

version 1