...WITHHOLDING TAX INTRODUCTION Imposed on non-residents on services rendered by them. The payer as an agent, to withhold a portion of the payment ‘withholding tax’ and pay to the tax authorities. Net payment Non-resident Withholding tax Payer Tax authorities SCOPE OF WITHOLDING TAX Withholding tax is only restricted to the following types of payment made to non-resident: (a) (b) (c) (d) (e) (f) Special classes of income (S 4A) Interest (S 15) Royalty (S 15) Contract payment (S 107) Public entertainer (S 109A)’ Other income in S4(f) (S15B) Type of Income Charging Section WT Section/Rate Interest 3/4(c) 109 - 15% Royalty 3/4(d) 109 - 10% Contract payment 3/4(a) Public Entertainer Rem. 3/4(a)/4(b) 109A - 15 Special classes of income 4f 109B - 10% Non-Exempt Interest to individual 4(c) 109C - 5% resident NR R 107A - 10%+3% Sec. 4A Income. Interest. Royalty. Contract Payment. Public Entertainer’s. Remuneration. Net Payment Payer NonResident •Within 1 Month of Paying or Crediting. •Crediting means “making available to” and not crediting in the accounting sense. Tax Authorities SCOPE OF WITHOLDING TAX The non-resident would only be liable for withholding tax if all the following factors are present: (i) The recipient is a non-resident; (ii) The income has to be one of the categories in the scope; (iii) Such income has to be deemed derived from...
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...An Analysis of the Government's Role in the Mining Industry in the Philippines Steven B. Baria Kim Edbonn C. Castillo Maridy D. Nuyda Economics 151 Prof. Teresa J Ho March 13, 2013 The stance of the government in recapturing the essence of the mining industry in the country has been reiterated time and again. The industry has been tapped as one of the most viable provider of revenues and employment through local and foreign investments. Past administrations had stressed the importance of favorable investment conditions that is supposed to promote the economic growth and progress, particularly in the mining industry. However, various issues has haunted the implementation of a holistic mining industry in the nation. This paper aims to provide a view of the efficiency and equity issues that plagues the whole of the mining sector and what the government can do in order to cater to these considerations. The Philippine case would be the vantage point of the study. The paper starts by defining some terms that is helpful in understanding the entire paper. A discussion of the externalities emanating from the mining industry and equity and efficiency arguments follows suit. Lastly an analysis of the government’s role in the Philippines and some recommendations are given. Mining: Some Definitions Mining is the useful extraction of minerals and other geological materials from the surface of the earth. This involves complicated and expensive processes and is accompanied by externalities...
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...| ------------------------------------------------- Top of Form | | | | Language | | | | ------------------------------------------------- Top of Form | Bottom of Form | | | | | | * Tenders * Downloads * Income Tax Returns * Wealth Tax Return * Forms * Challans * International Taxation * Non Residents * Foreign Companies * Advance Rulings * Transfer Pricing * DTAA * Comprehensive agreements * Limited agreements * Other Agreements * Tax Information Exchange Agreement (TIEA) * Witholding Tax * Tax Law and Rules * Acts * Income Tax Act * Wealth Tax Act * Gift Tax Act * Expenditure Tax Act * Interest Tax Act * Finance Acts * Rules * Income Tax Rules * Wealth Tax Rules * Gift Tax Rules * Expenditure Tax Rules * Interest Tax Rules * Advance Ruling * ITAT Rules * Settlement Commission Rules * Circulars * Notifications * About Us * History of Direct Taxation * Vision, Mission, Values * Organisation and Functions * CBDT * Directorate Generals * Administration * Legal & Research * Systems * Vigilance * NADT * Exemptions * HRD * International Taxation ...
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...2)classes of income 3)resident status 4)income from employment 5)tax relief and rebates 6)individual tac computation 7)interest income 8)dividend income 9)rental income 10)witholding tax 11)partnership-tax treatment for investment income 12)estate under administration 13)estates under administration 14)settlements 15)trusts 16)badges of trade 17)business income 18)business expenses 19)interest expenses 20)trading stock 21)capital allowances 22)industrial building allowance 23)controlled sales 24)mining allowance & prospecting expenditure 25)approved donation & zakat 26)group relief for companies 27)restriction on use of loss on change in ownership 28)company taxtion 29)double dedustion 30)research & development 31)exemption for increased exports of goods & commodities 32)exemption for increased exports of manufactured products & agricultural produce 33) exemption for increased exports of qualifying services 34)income tax (deduction for cost of acquisition of proprietary rights) 35)income tax (deduction for cost on acquisition of a foreign owned company) 36)single tier dividend system & section 108(6) 37)professional communication tools-reports,letters.... 38)tax incentives-pioneer statuss,investment tax allowance,renvestment allowance 39)computation of chargeable income-company 40)self assessment for individual & companies 41)tax avoidance & wilful evasion 42)tax audit & tax investigation 43)advanced ruling 44)company liquidition 45)transfer...
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...status determined under the Income Tax Act 1967 (as amended) ANSWER: An individual is resident for the calendar year if: (1) He is in Malaysia in a calendar year for 182 days or more [Sec 7(1)(a)] (2) He is in Malaysia in that calendar year for a period of less than 182 days and that period is linked by or to another period of 182 or more consecutive days in the relevant year. Certain temporary absences not exceeding 14 days in the aggregate are ignored for the purpose of ascertaining the consecutive period of 182 days and the link period from year of assessment 2002 [ Sec 7(1)(b)]. (3) He is in Malaysia for a period of periods of 90 days or more in a particular and in three out of the four immediately preceding years of assessment he is either resident or in Malaysia for a period or periods of 90 days or more. (4) He is resident in Malaysia for the calendar year following the relevant calendar year, having been resident for the three calendar years preceding the relevant calendar year [Sec 7(1) (d)]. QUESTION 2 List out the tax advantages of being a tax resident in Malaysia? ANSWER: An individual who is a tax resident would receive a preferential tax treatment as compared to a non-resident individual. 1) Scope of charge: The scope of charge for both resident and non-resident individuals is the same from YA 2004 -Both are taxed only upon Malaysian derived and accrued income. 2) Tax Rates: Resident individuals are subject...
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...1.0 Introduction From the Malaysian perspective, to begin with, there must first be a tax liability under the Malaysian Income Tax Act, 1967 (ITA). Once this is established, then one has to check the provisions in the DTA to see whether a reduction of tax rate or total elimination is available. If so, the DTA must be respected. This is clearly provided in the ITA, namely S 132(1) which states that if the Minister by statutory order declares that arrangements set out in such order been made by the with the government of any territory outside Malaysia in order to give to the relief of double taxation in relation to tax beneath this Act and any other foreign tax territory and it was is expedient that those arrangements should have effect (Choong, 2013). Next, as long as the order remains in force, those arrangements shall be effective in relation to tax beneath this Act notwithstanding anything in any written law. Whilst the above law is quite clear, there have been litigations on this aspect. And, as expected, it has been established that due respect should always be given to the DTAs that the Malaysian Government has entered into (Choong, 2013). 2.0 Scope of DTAs Double Taxation Agreement (DTA) is a deal between two nations who want to avoid double taxation by determining the taxing rights of each nation taking into consideration cross-border flows of revenues and provide tax credits or exemptions to eliminating double taxation (Yong, 2012). The objective of the DTA Malaysia...
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...2013 Budget Speech Minister of Finance Pravin Gordhan 27 February 2013 ISBN: 978-0-621-41456-1 RP: 345/2012 To obtain copies please contact: Communications Unit National Treasury Private Bag X115 Pretoria 0001 Tel: +27 12 315 5526 Fax: +27 12 315 5126 Budget documents are available at: www.treasury.gov.za 2013 Budget Speech Honourable Speaker I have the honour to present the fourth budget of President Zuma’s administration. Mr President you said in the State of the Nation address that “we should put South Africa first. All of us have a patriotic duty and responsibility to build and promote our country.” You further said “The National Development Plan provides a perfect vehicle for united action precisely because it has the support of South Africans across the political and cultural spectrum. Leaders in every avenue should be ready to rise above sectional interests and with great maturity, pull together to take this country forward.” This challenge applies to all sections of our society: business, labour, public representatives, activists and citizens in every part of the country. As we pointed out in the 2012 Budget, global economic uncertainty will remain with us for some time. South Africa’s economic outlook is improving, but requires that we actively pursue a different trajectory if we are to address the challenges ahead. 1 2013 Budget Speech Under your leadership Mr President, we have opened new channels of communication and built more cohesion among...
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...TAX COMPETENCIES, COMPLIANCE COSTS AND INCOME TAX COMPLIANCE AMONG SMEs IN UGANDA BY ANNET NAKIWALA 2007/HD10/11264U A DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT S FOR THE AWARD OF THE DEGREE OF MASTER OF SCIENCE IN ACCOUNTING AND FINANCE OF MAKERERE UNIVERSITY September, 2010 TAXCOMPETENCIES, COMPLIANCE COSTS & INCOME TAX COMPLIANCE DECLARATION I, Annet Nakiwala, declare that this dissertation is my own work and that it has never been presented for a degree award at any other university. Signature: ………………………………………… Date: ……………………………………………… ii TAXCOMPETENCIES, COMPLIANCE COSTS & INCOME TAX COMPLIANCE APPROVAL This is to certify that this dissertation has been submitted in partial fulfillment of the requirement for the award of a Masters of Science degree in Accounting and Finance of Makerere University with my approval as University Supervisor. Joseph Ntayi (PhD) Supervisor Signature: ………………… Date: ……………………… Arthur Sserwanga Supervisor Signature: ………………… Date: …………………….. iii TAXCOMPETENCIES, COMPLIANCE COSTS & INCOME TAX COMPLIANCE DEDICATION I dedicate this entire effort to my late Mother Gorreth Nabagereka. We miss you dearly. iv TAXCOMPETENCIES, COMPLIANCE COSTS & INCOME TAX COMPLIANCE ACKNOWLEDGEMENTS Completion of this research has been a result of both direct and indirect support of many people to whom I owe acknowledgement. I owe profound gratitude to my supervisors Dr. Joseph Ntayi and...
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...Private Inurement In order for any healthcare organization or nonprofit hospital to become income tax exempt under Section 501(c)(3) they must ensure that no portion of the hospital or organizations net earnings benefits any individual or private shareholder associated with the organization. When an organization qualifies as a 501(c)(3), the IRS presumes it is a private foundation unless the organization can show it is a public charity. This excludes statutory public charities such as schools and churches. A charity organization can lose tax exempt benefits if found to violate the private inurement proscription. Inurement violations can occur when a financial benefit occurs from the allocation of an organization’s financial resources to an individual without regard to exempt status in mind and based solely on the individual’s relationship with the organization. Individuals or private shareholders are known as “insiders” who have a personal interest in the organization’s activities or the individual is in a position to influence the organization (Zarzar, 2001). According to Karl Emerson, excessive compensation is the most common type of private inurement paid to insiders within an organization. There are other forms of private inurement that can cause an organization to lose their tax exempt status or impose intermediate sanctions such as: organizations purchase of an asset from an insider; sale of organization’s asset to an insider; the organization’s rental of property to...
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...information needed to calculate WACC can be found on a balance sheet. Difficulty:Moderate Instructions Calculating WACC 1 Gather the required information from the balance sheet. Finding the information is the hardest step. Write out the full WACC equation and list the variables separately. It is a good idea to make a list of all your variables before rewriting the equation. WACC = [(E/V) * Re] + [(D/V) * Rd * (1-Tc)] Re= cost of equity (expected rate of return on equity) Rd = cost of debt (expected rate of return on debt) E = market value of company equity D = market value of company debt V = total capital invested, which equals E + D E/V = percentage of financing that is equity D/V = percentage of financing that is debt Tc = corporate tax rate Start calculating the variables. Start with cost of equity and cost of debt. Some companies include these ratios on the balance sheet or income statement. It is a good idea to check both those reports and the executive summary at the beginning of financial statements---why do calculations if the company has done them for you? 2 http://www.ehow.com/print/how_5325911_calculate-wacc-balance-sheet.html 4/6/2013 How to Calculate the WACC From a...
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...ECONOMICS IN ONE LESSON by Henry Hazlitt Nobel Laureate in Economics, F.A. Hayek said in 1974 about Hazlitt‟s book: “It is a brilliant performance. It says precisely the things which need most saying and says them with rare courage and integrity. I know of no other modern book from which the intelligent layman can learn so much about the basic truths of economics in so short a time.” (Back cover) “This book is an analysis of economic fallacies that are at last so prevalent that they have almost become a new orthodoxy....its effort is to show that many of the ideas which now pass for brilliant innovations and advances are in fact mere revivals of ancient errors, and a further proof of the dictum that those who are ignorant of the past are condemned to repeat it.” (pp. 9-10) “As Morris R. Cohen has remarked: „The notion that we can dismiss the views of all previous thinkers surely leaves no basis for the hope that our own work will prove of any value to others.‟” (interior quote: Reason and Nature (1931), p.x.; Hazlitt, p.10) “It is the beliefs which politically influential groups hold and which governments act upon that we are interested in here, not the historical origins of those beliefs....Fallacies, when they have reached the popular stage, become anonymous anyway.” (p.11) The Lesson: “Economics is haunted by more fallacies than any other study known to man. This is no accident.” (p. 15) “While every group has certain economic interests identical with those of all groups, every...
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...1. Case summary: Russia used export taxes on oil after the fall of Soviet Union which caused a huge GDP declined. After that the new Russian government freed most consumer and producer prices and this abolished the state foreign trade monopoly. The export and the value add were proven as the largest sources of tax revenue for the Russian. Government reduced income tax after implementing this strategy. This strategy accelerate the GDP increase and the budget revenue doubled from 12%-24%. Only for this reason Russian fiscal balance had shifted from a deficit of 6% to a surplus of 9% of GDP. These proved that in Russia export duties and other taxes on energy producers provide the largest sources of tax revenue which is centralized in the federal budget. Major Problems with the Oil Industry In 1991, after a long period of economic and political stagnation, the Soviet Union collapsed. The energy industry contracted along with the rest of the Soviet economy. Oil production in 1996 was less than 6 million barrels a day – about half of pre-1990 levels. This contraction was partly due to the overall slowdown in the Russian economy that caused a decrease in energy demand. The energy sector also suffered because of the inefficiencies inflicted upon the Russian economy during the administrative-command system of the Soviet Union and the reluctance of post-Soviet governors of Russia to implement policies that would remedy these inefficiencies in an era of otherwise open market conditions...
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...Research Problem 1 1. Discuss the different types of interests and the IRS rule related to the deductibility of each type for tax purposes. Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. There are different types of interests, including investment interest, qualified residence interest, student loan interest, and personal interest, which are either deductible or nondeductible. Personal interests are interests on car loans, credit cards, loans for appliances and furniture and interest on loans made by one person to another. Personal interest is nondeductible. If interest is paid on a qualified student loan, taxpayers may be able to deduct the interest as deduction for AGI. Generally, the allowable amount for student loan is lesser of $2,500 or the amount of interest taxpayer actually paid. Investment interest is interest paid on money borrowed to purchase or hold investment property. It is tax deductible on income tax return up to the amount of the net investment income. However, if the interest is incurred to produce tax exempt income, it cannot be deducted. Investment interest is not any qualified home mortgage interest or any interest taken into account in computing income or loss from a passive activity. The qualified residence interest is interest taxpayer pays on a loan secured by one’s main home or a second home. The loan may be a mortgage to buy primary home, a second mortgage, a home equity loan, or line...
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...function and survive. It is this constant necessity for capital that gives way to much of the debate within tax accounting. In the United States, citizens and taxable businesses have an obligation to pay taxes to the government’s tax collecting body, the Internal Revenue Service. The IRS functions as the implementing body for the U.S. tax laws found in the Internal Revenue Code. While the IRC serves as the main source of regulation for taxation, actual implementation is a very subjective issue and left open to multiple interpretations. Within the IRC, taxpayers are entitled to numerous deductions that, in essence, reduce their tax liability. The ability to reduce taxes creates an incentive to analyze the Code and utilize every method possible that will help save money. This practice, in turn, opens the door for tax avoidance and aggressive tax accounting. One of the most aggressive tax issues that the IRS faces is the usage of tax shelters. A tax shelter is an investment that utilizes loopholes in order to avoid the payment of taxes. Many tax shelters that have been developed are considered completely legal and follow the IRC properly, serving some major economic purpose. In the late twentieth century, it became common practice for big accounting firms to develop and market different tax shelters in order to reduce their client’s tax liabilities. Some of the tax...
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...National Government The President discussed 5 important points in his 2013State of the Union Speech and they were: Immigration Reform: Minimum Wage Increase: Tax Reform & Debt Ceiling: Climate Change and Gun Control. At a time when Republicans are insisting on spending cuts, Obama pushed more public spending on universal preschool, construction work on bridges and schools and a jobs program rebuilding vacant homes in rundown neighborhoods. He pushed for an increase in the minimum wage to $9 an hour, with future increases tied to the cost of living. And he continued to push in support of left-leaning social issues including gun control, immigration reform, climate change and advancing equal rights for gays. President Obama stated how the American people does not expect government to solve every problem nor agree on every issue, but we do expect for the government to put the nation’s interests before party. He stated that their work must begin by making some basic decisions about the budget, decisions that will have a huge impact on the strength of American recovery. Over the last few years, both parties have been working together to reduce the deficit and has done so by more than $2.5 trillion, mostly through spending cuts, but also by raising tax rates on the wealthiest 1 percent of Americans. As a result, we are more than halfway towards the goal of $4 trillion in deficit reduction that economists say we need to stabilize our finances....
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