TAX 3701

QUESTIONS

The Taxation of Business Activities Both semesters Department of Taxation STUDY GUIDE 1 OF 2 The Taxation of Business Activities Both semesters Department of Taxation STUDY GUIDE 1 OF 2

QUESTION 1 VAT Payable /refundable VAT Input /(output) Board and Lodging – Mr. Bryan R29 000 X 14/114 (R3561) Board and Lodging – other exempt s12c - Insurance claim received Office cupboard R1200 X 14/114 (R147) Flowers used for decoration R5000 X 14/114 (R614) Laser printer – financial services Long –term insurance exempt - Furniture and Fittings R7800 X 14/114 R958 Vehicle payment R8400 X 14/114 R1032 Purchases – food and cleaning agents R9 200 X14/114 R1130 Fuel ze...

Question 1 Tax liability of eZhonda (Pty) Ltd for the year of assessment ended 28 February 2019. Rand Rand Taxable income 73 859 000,00 Factory Building (Section 13) = * 5% - 525 000,00 Restraint of Trade (Section 11(cA) = less than 3 year therefore 3mil/3 - 1 000 000,00 Research & development costs (Section 11D) = 600 000 * 150% - 900 000,00 Patent purchased (Sec 11(gC)): cost less than 5000 hence full deduction allowed - 4 500,00 © CTM Tutoring All rights rese

QUESTION 1 What is the output VAT on the income from transporting goods? (1) R63 375 (2) R84 783 (3) R97 500 (4) Rnil R650 000 × 15/115 = R84 783 3 QUESTION 2 What is the output VAT on the income from transporting passengers? (1) R28 614 (2) R30 391 (3) Rnil – exempt supply (4) Rnil – zero-rated supply  Note that the supply of public transport by road or rail is exempt from VAT if the transportation o takes place between two places within the RSA o is of fare-paying pass...