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TAX3701 Assignment 2 Semester 1 |ANSWERS| - DUE 16 APRIL 2026

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TAX3701 Assignment 2 Semester 1 |ANSWERS| - DUE 16 APRIL 2026 100% COMPLETE ANSWERS

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TAX3701
Assignment 2

Semester 1
DUE: 16 APRIL 2026

, QUESTION 1 – SUGGESTED SOLUTION
Calculation of the normal income tax liability for Thabo Manufacturing (Pty) Ltd
for the year of assessment ended 31 March 2026

DESCRIPTION CALCULATION R

GROSS INCOME

Sales Revenue; received in the 27 789 261
course of trade

Bad debt written off – client in s 11(i): debt due to TM from (22 520)
final liquidation (s 11(i)) sale on 22 Nov 2025; became
bad during 2026 year (DC
Attorneys confirmed final
liquidation 15 Mar 2026);
previously included in income –
all 3 requirements met

Interest received from South Revenue; no interest 17 780
African banks exemption available to
companies

Foreign dividends – 3% equity TM holds only 3% < 10% 145 200
holding threshold; full s 10B(2)(a)
participation exemption does
NOT apply; included in gross
income

SA dividends received – SA dividends subject to 20% Nil
EXCLUDED (s 10(1)(k)(i)) dividends tax (final tax);
therefore exempt from normal
income tax

GROSS INCOME 27 929 721



LESS: EXEMPT INCOME

SA dividends exempt (s 10(1) Exempt from normal income (114 520)
(k)(i)) tax

Foreign dividend partial TM is a company; ratio = 8/28; (41 486)
exemption (s 10B(3)) 8/28 x R145 200 = R41 486
Connected book
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Unknown Statistics of Income
Publisher: Unknown ISBN: 9780808011651 Edition: Unknown

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