QUESTION: 17

Entity RH has an recognised a taxable profit of $1.Smillion for 20X1'. In Entity RH's resident country. Country M, depreciation charges and entertaining expenses are disallowed expenses. Below is some information on Entitry RH's outgoings for the period:
Depreciation charged on PPE: $450,000
Political donations: $155,000
Staff parties: $3,200
Cost of updating assets: $10,000
Other expenses: $83,500
In Country M, there is a standard corporation tax of 12% charged on all corporation profits.
What is Entity RH's total tax liability for this period?

$234,384
$125,616
$254,184
$252,984

Answer(s): A

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QUESTION: 18

Entity T operates within several countries, but its country of residence is Country F. In 20X5, Entity T made $8.4 million in Country M. Country M has a flat rate corporation tax of 5.9%. Country F and Country M operate a double taxation treaty which uses a foreign tax credit system. In Country F, there is a tax of 10% tax on all foreign income. Taking into account the credit, what is the total tax liability that Entity T owes on its Country M income, in Country F?