Tax incentives for Export Processing Zone Enterprises
i) EPZ enterprises are tax exempt for the first 10 years and pay 25% corporation tax on income for the next 10 years
ii) During the period in which an export processing zone enterprise is exempt from corporation tax the enterprise shall be deemed to be subject to a non-resident withholding tax on payments made to such enterprises where such payments are made by a person who is not an processing enterprise, the tax shall be shall be final tax
iii) Payment by EPZ enterprises shall be zero rated or exempt for tax purpose e.g. import of machinery equipment and goods for use in the enterprise.
iv) Cost of building and machinery is 'expensed' by granting investments deduction at the rate 100%
Wilfykil answered the question on February 25, 2019 at 08:54
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Charitable trusts are nonprofit making organizations formed with the objective of promoting the social well-being of the general public. With reference to sections 25 and...
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Charitable trusts are nonprofit making organizations formed with the objective of promoting the social well-being of the general public. With reference to sections 25 and 26 of the income tax act (cap 470), explain the tax treatment of the charitable trusts
Date posted:
February 25, 2019
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Answers (1)
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Bima Insurance Company Limited is registered in Kenya to carry out life and general insurance business. From its general ledger and other records for the...
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Bima Insurance Company Limited is registered in Kenya to carry out life and general insurance business. From its general ledger and other records for the year ended 31 December 2003, you have been able to extract the following information:
Date posted:
February 25, 2019
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Answers (1)
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The management of Shamrock Bank Ltd. Has sought your professional guidance in determining the Bank’s tax liability for the year ended 31 December 2003.
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The management of Shamrock Bank Ltd. Has sought your professional guidance in determining the Bank’s tax liability for the year ended 31 December 2003.
The income statement of Shamrock Bank Ltd. For the year ended 31 December 2003 is given below:
Date posted:
February 25, 2019
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Answers (1)
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Alpha Insurance Company Ltd, provides motor vehicle and fire insurance covers to its policy holders.
The following information was extracted from the financial records of the...
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Alpha Insurance Company Ltd, provides motor vehicle and fire insurance covers to its policy holders.
The following information was extracted from the financial records of the company for the year ended 31 December 2004:
Date posted:
February 25, 2019
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Answers (1)
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Omega insurance company is a resident insurance business carrying, on both general and life insurance businesses. The following relates to the insurance company’s financial year...
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Omega insurance company is a resident insurance business carrying, on both general and life insurance businesses. The following relates to the insurance company’s financial year ended 31st December 2010
Date posted:
February 25, 2019
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Answers (1)
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Wakulima savings & Credit Co-op. Society Ltd prepared the following income statement for the year ended 31st December 2010
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Wakulima savings & Credit Co-op. Society Ltd prepared the following income statement for the year ended 31st December 2010
The SACCO intends to distribute Shs. 100,000 as dividend and bonuses to its members. All investment incomes have been stated gross of withholding tax where applicable.
Required;
Determine the taxable profit and tax liability if any of Wakulima Sacco for the year end 31 December
Date posted:
February 25, 2019
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Answers (1)
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Explain how savings and Credit cooperatives society (Sacco) are taxed
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Explain how savings and Credit cooperatives society (Sacco) are taxed
Date posted:
February 25, 2019
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Answers (1)
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Githunguri Dairy farmers cooperative society and prepared the following income statements for the year ended 1st December 2010
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Githunguri Dairy farmers cooperative society and prepared the following income statements for the year ended 1st December 2010
Date posted:
February 25, 2019
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Answers (1)
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Makazi Savings and Credit Cooperative Society (Sacco) Ltd. reported the following incomes and expenditure for the year ended 31 December 2005:
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Makazi Savings and Credit Cooperative Society (Sacco) Ltd. reported the following incomes and expenditure for the year ended 31 December 2005:
Required:
The taxable profit of Makazi Sacco Ltd. for the year ended 31 December 2005
Date posted:
February 25, 2019
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Answers (1)
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Malipo General Insurance Company Limited has provided the following details with respect to its financial year ended 31 December 2005.
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Malipo General Insurance Company Limited has provided the following details with respect to its financial year ended 31 December 2005.
Date posted:
February 25, 2019
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Answers (1)
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Salim Mambo and Shem Bakari have been running Mabaka Enterprises as a partnership for the last five years.
They have provided you with the following information...
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Salim Mambo and Shem Bakari have been running Mabaka Enterprises as a partnership for the last five years.
They have provided you with the following information relating to their business in the year ended 31 December 2001
Date posted:
February 25, 2019
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Answers (1)
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Jackson and Martin, who are both resident in Kenya, are in partnerhip trading as Jama Investments. The following details relate to their business for the...
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Jackson and Martin, who are both resident in Kenya, are in partnerhip trading as Jama Investments. The following details relate to their business for the year ended 31 December 2003. Profits and losses are shared by Jackson and Martin in the ratio of 2:3 respectively.
Date posted:
February 25, 2019
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Answers (1)
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Shada and Pete have been operating a jewellery retail business in Nairobi and sharing profit and losses equally. They have not maintained proper records of...
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Shada and Pete have been operating a jewellery retail business in Nairobi and sharing profit and losses equally. They have not maintained proper records of their transactions.
They have engaged you at an agreed fee of Sh. 50,000 to prepare their books and make their annual tax returns. You establish that the partners earn salaries annually and also charge 10% interest per annum on their drawings
The following presented to you is relevant:
Date posted:
February 25, 2019
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Answers (1)
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Ali and Musa are in partnership trading as Alimusa Enterprises. They share profits and losses in the ratio of 2:3 for Ali and Musa respectively....
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Ali and Musa are in partnership trading as Alimusa Enterprises. They share profits and losses in the ratio of 2:3 for Ali and Musa respectively. The partners presented the following profit and loss account of the partnership for the year ended 31 December 2004:
Date posted:
February 25, 2019
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Answers (1)
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Jared Kimutai and Peter Wakoli have been trading in partnership as Kimwa enterprises for the past ten years. The business was converted into a private...
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Jared Kimutai and Peter Wakoli have been trading in partnership as Kimwa enterprises for the past ten years. The business was converted into a private limited liability company Mwanzo limited on 1 October 2005 with the partners becoming the directors of the new company
The following details were availed to you assist in the filing of tax returns for the financial year ended 31 December 2005
Date posted:
February 25, 2019
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Answers (1)
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Christine Atieno and Rose Njeri started a law firm as partners on 1st January 2007. They named the firm Atieno, NJeri and Associates. The partners...
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Christine Atieno and Rose Njeri started a law firm as partners on 1st January 2007. They named the firm Atieno, NJeri and Associates. The partners opened a joint bank account where Njeri deposited sh. 3,000,000 and Atieno sh. 2,000,000 as initial capital. They also agreed that profits and losses would be shared in the ratio of the initial of their capital contributions. Further, they agreed that interest on capital on capital would be paid at 5% per annum based on the initial capital contributions.
On 5th January, 2007 the firm signed a six year lease for an office at an annual lease payments of sh. 200,000. The lease contract required the partners to deposit a lump sum to cover the lease payments for the first two years of lease term
On 11th January, 2007 the firm purchased the following assets for use in the business
Date posted:
February 25, 2019
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Answers (1)
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Chunga Insurance Company Ltd. has provided the following details with respect to its financial year ended 31 December 2007:
(Solved)
Chunga Insurance Company Ltd. has provided the following details with respect to its financial year ended 31 December 2007:
Date posted:
February 25, 2019
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Answers (1)
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Jostina and Maweu are partners running hardware business based in Nanyuki Town. They have approached you to assist them prepare the partnership return for the...
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Jostina and Maweu are partners running hardware business based in Nanyuki Town. They have approached you to assist them prepare the partnership return for the year ended 31 December 2011. The following information has been presented to you
1. The partnership agreement provides that:-
- Profit and losses will be apportioned in the ratio of 2:1 for Jostina and Maweu respectively.
- Partner will be allowed to withdraw up to Sh. 100,000. In cash without being charged interest. Any excess withdrawals will be subject to interest at a rate of 8% per annum
- Each partner will be entitled to a monthly salary of sh. 60,000 per month. However, no salary would be paid to any partner in the months of January, May and September due to expected low sales based on analysis of past trends. Partners would also be entitled to a commission
2. The balances in the books of account as at 31st December 2011 and 31st December 2010 included the following:
Date posted:
February 25, 2019
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Answers (1)
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The following information was presented to you by the management of Malipo Pole Enterprises limited. The company deals in the sale of photocopier machines on...
(Solved)
The following information was presented to you by the management of Malipo Pole Enterprises limited. The company deals in the sale of photocopier machines on hire purchase terms
1. The company purchases photocopier machines at sh. 60,000 each
2. The hire purchase price per unit comprises a deposit of sh. 16,000 and eight quarterly installments of sh. 8,000. The cash price per unit is sh. 70,000
3. During the year ended 31 December 2008, the company sold 4,040 units of which collections of sh. 960,000 were received as at the year end.
4. During the year ended 31 December 2008, the company repossessed 40 units which had been sold earlier in the year.
5. Operating expenses during the year amounted to sh. 7,400,000
6. The revenue authority has reached an agreement with the management of the company whereby profits for tax purposes will be determined on the basis of proportionate cash collected from customers for the year’s sales.
Required:
a) Taxable income or losses of Malipo Pole enterprises Limited for that year 31 December, 2008
b) Distinguish between an operating lease and a finance lease in the context tax of law and regulations
Date posted:
February 25, 2019
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Answers (1)
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Sporting members club was formed in November 2007 but became operational on1 January 2008. For the year ended 31 December 2008. The club did not...
(Solved)
Sporting members club was formed in November 2007 but became operational on1 January 2008. For the year ended 31 December 2008. The club did not submit income tax returns. The club manager argued that section 21 of the income Tax Act excluded the club from taxation.
However upon being advised by one of the club members to consult a tax expert on the issue, the manager has approached you for further clarification and has provided the following information
Date posted:
February 25, 2019
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Answers (1)