TAX3761 ASSIGNMENT 2
PART A
STYLES (PTY) LTD
Calculation Vat payable for the two month tax period ended 29
February 2020
OUTPUT VAT
Local sales (1 213 000 x 15/115) 158 217
Export sales - Zambia: zero-rated -
Right of use of motor vehicle [ (450 000 x 100/115 x 0,3% - 85) x
15/115 x 2] 284
158 501
INPUT VAT
Raw material purchases
- South Africa (560 000 x 15%) 84 000
- Second hand material from a non-vendor (80 000 x 15/115)
10 435
- Purchases from American supplier
Customs duty value 181 000
Import surcharges 9 800
10% of customs duty value (181 000 x 10%) 18 100
Value of the imports for VAT purposes 208 900
Vat claimable ( 208 900 x 15%) 31 335
Fuel - zero-rated -
Salaries - not a supply for VAT purposes -
Bank charges (500 x 15%) 75
Interest on overdraft - financial service - exempt -
125 845
Vat payable (158 501 - 125 845) 32 656
PART B
(i)
STYLES (Pty) Ltd
Calculation of taxable income for the 2020 year of assessment
, Sales 12 500 000
South African dividends - exempt -
Foregn dividend 90 000
Foreign dividend exemption (90 000 x 8/28) (25 714) 64 286
Machine Wood
Cost (517 500 x 100/115) 450 000
Sec 12C Allowances : 2019 (450 000 x 20%) (90 000)
: 2020 (450 000 x 20%) (90 000) (90 000)
Tax value 270 000
Proceeds 320 000
Less: tax value (270 000)
Recoupment 50 000
Limited to allowances previously claimed (180 000)
Recoupment (Paragraph 65/66) (50 000 x 40%) 20 000
Machine Stone - S12C allowance (680 000 x 40%) (272 000)
Opening inventory at cost (2 487 000)
Closing inventory at market value 1 440 000
South African raw material purchases (6 570 000)
American raw material purchases (66 000 x 13,89) (916 740)
Foreign exchange gain (13,89 - 13,18) x 66 000 46 860
Salaries (2 980 000)
Learnership agreement
Commencement allowance (40 000 x 11/12) (36 667)
Completion allowance - not deductible as learnership was not
completed in current year -
Doubtful debt allowance
- 2019 65 000
- 2020 : > 60 days (105 000 x 25%) (26 250)
:> 120 days (25 000 x 40%) (10 000)
Trademark registration renewal (8 700)
Depreciation - not deductible for tax purposes -
PART A
STYLES (PTY) LTD
Calculation Vat payable for the two month tax period ended 29
February 2020
OUTPUT VAT
Local sales (1 213 000 x 15/115) 158 217
Export sales - Zambia: zero-rated -
Right of use of motor vehicle [ (450 000 x 100/115 x 0,3% - 85) x
15/115 x 2] 284
158 501
INPUT VAT
Raw material purchases
- South Africa (560 000 x 15%) 84 000
- Second hand material from a non-vendor (80 000 x 15/115)
10 435
- Purchases from American supplier
Customs duty value 181 000
Import surcharges 9 800
10% of customs duty value (181 000 x 10%) 18 100
Value of the imports for VAT purposes 208 900
Vat claimable ( 208 900 x 15%) 31 335
Fuel - zero-rated -
Salaries - not a supply for VAT purposes -
Bank charges (500 x 15%) 75
Interest on overdraft - financial service - exempt -
125 845
Vat payable (158 501 - 125 845) 32 656
PART B
(i)
STYLES (Pty) Ltd
Calculation of taxable income for the 2020 year of assessment
, Sales 12 500 000
South African dividends - exempt -
Foregn dividend 90 000
Foreign dividend exemption (90 000 x 8/28) (25 714) 64 286
Machine Wood
Cost (517 500 x 100/115) 450 000
Sec 12C Allowances : 2019 (450 000 x 20%) (90 000)
: 2020 (450 000 x 20%) (90 000) (90 000)
Tax value 270 000
Proceeds 320 000
Less: tax value (270 000)
Recoupment 50 000
Limited to allowances previously claimed (180 000)
Recoupment (Paragraph 65/66) (50 000 x 40%) 20 000
Machine Stone - S12C allowance (680 000 x 40%) (272 000)
Opening inventory at cost (2 487 000)
Closing inventory at market value 1 440 000
South African raw material purchases (6 570 000)
American raw material purchases (66 000 x 13,89) (916 740)
Foreign exchange gain (13,89 - 13,18) x 66 000 46 860
Salaries (2 980 000)
Learnership agreement
Commencement allowance (40 000 x 11/12) (36 667)
Completion allowance - not deductible as learnership was not
completed in current year -
Doubtful debt allowance
- 2019 65 000
- 2020 : > 60 days (105 000 x 25%) (26 250)
:> 120 days (25 000 x 40%) (10 000)
Trademark registration renewal (8 700)
Depreciation - not deductible for tax purposes -
