单选题Tee Ltd is an export trading company

单选题Big-Mart Store (BMS) offered a promotion whereby each walk-in customer received a packet of tissue paper free of charge

案例分析题(a) During a tax audit in October 2017

案例分析题(d) Mrs Ink is a China tax resident

案例分析题Ashura has been employed by Rift plc since 1 January 2013. She has also been self-employed since 1 July 2015, preparing her first accounts for the nine-month period ended 5 April 2016. The following information is available for the tax year 201516: Employment (1) During the tax year 201516, Ashura was paid a gross annual salary of 56,200. (2) On 1 January 2016, Ashura personally paid two subscriptions. The first was a professional subscription of 320 paid to an HM Revenue and Customs (HMRCs) approved professional body. The second was a subscription of 680 to a health club which Ashura regularly uses to meet Rift plcs clients. Ashura was not reimbursed for the costs of either of these subscriptions by Rift plc. (3) During the tax year 201516, Ashura used her private motor car for business purposes. She drove 3,400 miles in the performance of her duties for Rift plc, for which the company paid her an allowance of 55 pence per mile. (4) During the tax year 201516, Ashura contributed 2,800 into Rift plcs HMRC registered occupational pension scheme and 3,400 (gross) into a personal pension scheme. Self-employment (1) Ashuras tax adjusted trading loss based on her draft accounts for the nine-month period ended 5 April 2016 is 3,300. This figure is before making any adjustments required for: (i) Advertising expenditure of 800 incurred during January 2015. This expenditure has not been deducted in calculating the loss of 3,300. (ii) The cost of Ashuras office (see note (2) below). (iii) Capital allowances. (2) Ashura runs her business using one of the five rooms in her private house as an office. The total running costs of the house for the nine-month period ended 5 April 2016 were 4,350. No deduction has been made for the cost of the office in calculating the loss of 3,300. (3) On 10 June 2015, Ashura purchased a laptop computer for 2,600. On 1 July 2015, Ashura purchased a motor car for 19,200. The motor car has a CO2 emission rate of 137 grams per kilometre. During the nine-month period ended 5 April 2016, Ashura drove a total of 8,000 miles, of which 2,500 were for self-employed business journeys. Other information Ashuras total income for the previous four tax years is as follows: Tax year Total income 201112 10,700 201213 10,400 201314 48,800 201415 54,300 Required:

案例分析题TAX RATES AND ALLOWANCES The following tax rates and allowances are to be used in answering the questions. Individual income tax Entrepreneurs who receive production or operation income derived from private industrial or commercial enterprises Monthly personal allowance for a China local RMB 3,500 Additional allowance for expatriate employees RMB 1,300 Individual service income Allowance each time for individual service income, income from manuscripts, royalties and rental of property RMB 4,000 and below RMB 800 Over RMB 4,000 20% Income from: Manuscripts, royalties, interest, dividends, rental of property, transfer of property, incidental income and other income 20% Donations of individuals Limited to: 30% of the taxable income; or 100% if the donation is made to certain funds approved by the government​​​​​​​ VAT pilot programme for transportation and modern services Note: The above rates are based on the pilot rules effective from 1 August 2013. The new rules effective from 1 January 2014 are not examinable in the 2014 exams.​​​​​​​ Exchange rate USD1 = RMB

案例分析题(b) Ms Gu is a China tax resident

案例分析题(b) The STP group has two companies in China, one in Shanghai and another one in Guangxi

案例分析题(a) (i) Ms Zheng has citizenship and family in China. She was seconded to work in Singapore and has not returned to China since 2012. She receives her salary in Singapore. (ii) Mr Liu is a UK citizen and is employed by a UK employer. He was seconded to China from 1 January 2017. He stayed in China for 60 days in 2017. His salary was paid in the UK. (iii) Miss Xu is a UK citizen and is not domiciled in China. She started working in China from 1 January 2012 and has not left China since. She receives interest income from a bank in the UK in 2017. Required: State, with reasons, whether the income mentioned for each of the above persons is taxable in China in the year 2017. (b) Mr Ou is a Chinese citizen who retired in 2016. During a sight-seeing visit to Malaysia in August 2017, he received winnings from a Malaysian lottery of USD200. He paid Malaysian tax of USD30 on his winnings. He filed an annual individual income tax (IIT) return, for the tax year 2017, in China, and paid the tax due before the deadline in 2018. Required: (i) State the FOUR circumstances in which individual income tax (IIT) annual self-filing is required. Note: No marks will be given for stating other. (ii) State the date by which Mr Ou would have been required to submit an annual IIT return for the year 2017. (iii) Calculate the IIT payable by Mr Ou for the year 2017.

案例分析题(c) Ms Chen is a China tax resident

案例分析题Joe is the managing director and 100% shareholder of OK-Joe Ltd. He has always withdrawn the entire profits of the company as directors remuneration, but given a recent increase in profitability he wants to know whether this basis of extracting the profits is beneficial. For the year ended 5 April 2016, OK-Joe Ltds taxable total profits, before taking account of directors remuneration, are 65,000. After allowing for employers class 1 national insurance contributions (NIC) of 5,141, Joes gross directors remuneration is 59,859. The figure for employers NIC of 5,141 is after deducting the 2,000 employment allowance. Required: Calculate the overall saving of tax and NIC for the year ended 5 April 2016 if Joe had instead paid himself gross directors remuneration of 8,000 and net dividends of 45,600. Notes: 1. You are expected to calculate the income tax payable by Joe, the class 1 NIC payable by both Joe and OK-Joe Ltd, and the corporation tax liability of OK-Joe Ltd for the year ended 5 April 2016. 2. You should assume that the rate of corporation tax remains unchanged.

案例分析题TAX RATES AND ALLOWANCES The following tax rates and allowances are to be used in answering the questions. Individual income tax Entrepreneurs who receive production or operations income derived from private industrial or commercial operations Allowance per annum RMB42,000 Monthly personal allowance for a China local RMB3,500 Additional allowance for expatriate employees RMB1,300 Allowance each time for individual service income, income from manuscripts, royalties and rental of property RMB4,000 and below RMB800 Over RMB4,000 20% Income from: Manuscripts, royalties, interest, dividends, rental of property, transfer of property, incidental income and other income 20% Donations of individuals​​​​​​​ Limited to: 30% of the taxable income; or 100% if the donation is made to certain funds approved by the government ​​​​​​​ Note: The above rates are based on the pilot rules published by 30 September 2017. The new rules issued from 1 October 2017 onwards are not examinable in the 2018 exams. Exchange rate USD1 = RMB6​​​​​​​

案例分析题TAX RATES AND ALLOWANCES The following tax rates and allowances are to be used in answering the questions. Individual income tax Entrepreneurs who receive production or operations income derived from private industrial or commercial operations Allowance per annum RMB42,000 Monthly personal allowance for a China local RMB3,500 Additional allowance for expatriate employees RMB1,300 Allowance each time for individual service income, income from manuscripts, royalties and rental of property RMB4,000 and below RMB800 Over RMB4,000 20% Income from: Manuscripts, royalties, interest, dividends, rental of property, transfer of property, incidental income and other income 20% Donations of individuals​​​​​​​ Limited to: 30% of the taxable income; or 100% if the donation is made to certain funds approved by the government VAT pilot programme​​​​​​​ Note: The above rates are based on the pilot rules published by 30 September 2016. The new rules issued from 1 October 2016 onwards are not examinable in the 2017 exams. Exchange rate USD1 = RMB6

案例分析题(b)Const Ltd is a construction company in Xiamen

案例分析题(a) KT Ltd manufactures and sells gadgets via the internet. KT Ltd is a value added tax (VAT) general taxpayer. It carried out the following transactions in March 2018. (1) Purchased raw materials for RMB600,000, excluding VAT of RMB102,000, as shown on the VAT special invoice. 70% of the materials were used in production and 30% remained in stock in the warehouse. (2) Paid a transportation fee of RMB10,000, excluding VAT of RMB1,100, as shown on the VAT special invoice. (3) Paid rent to the landlord of RMB25,000, excluding VAT of RMB1,250 as shown on the VAT ordinary invoice issued by the landlord. (4) Purchased canned food and soft drinks for the staff canteen for RMB8,000, excluding VAT of RMB1,360, as shown on the VAT special invoice. (5) Purchased new machinery for RMB800,000, excluding VAT of RMB136,000, as shown on the VAT special invoice. It is expected the machinery can be used for a period of five years. (6) The normal price of gadgets is RMB44 for each piece. KT Ltd offered a promotion campaign where customers can receive a coupon worth RMB5 which can be used against the purchase of each gadget. The coupon cannot be exchanged for cash. In addition, customers who register as KT Club members can receive one gadget free of charge. The above prices are VAT inclusive. The following table shows the number of gadgets sold to or received free of charge by customers in March 2018: No. of gadgets Sold to customers at normal selling price 20,000 Sold to customers with coupons 8,000 Received free of charge by new KT Club members 2,000 (7) Sold old machinery and received RMB2,000. No invoice was issued. The machinery was acquired in November 2015 for RMB40,000, with input VAT of RMB6,800 credited in the month of purchase. Note: You should assume the above are the only transactions with VAT implications. Required: (i) Calculate the input value added tax (VAT) credit on items (1) to (5) above. State no VAT credit for items which are not eligible for input tax credit. (ii) Calculate the output VAT on items (6) and (7) above. (b) Explain the differences in VAT treatment between exempt and zero rated supplies.

案例分析题TAX RATES AND ALLOWANCES The following tax rates and allowances are to be used in answering the questions. Enterprise income tax Deduction limits on certain expenses Individual income tax Entrepreneurs who receive production or operations income derived from private industrial or commercial operations Allowance per annum RMB42,000​​​​​​​ Employment income Monthly personal allowance for a China local RMB3,500 Additional allowance for expatriate employees RMB1,300 Individual service income Allowance each time for individual service income, income from manuscripts, royalties and rental of property​​​​​​​ RMB4,000 and below RMB800 Over RMB4,000 20% Income from:​​​​​​​ Manuscripts, royalties, interest, dividends, rental of property, transfer of property, incidental income and other income 20% Donations of individuals​​​​​​​ Limited to: 30% of the taxable income; or 100% if the donation is made to certain funds approved by the government VAT pilot programme Note: The above rates are based on the pilot rules published by 30 September 2015. The new rules issued from 1 October 2015 onwards are not examinable in the 2016 exams. Exchange rat USD1 = RMB​​​​​​​

案例分析题Lambda Ltd was set up in Guangzhou 12 years ago

案例分析题(c) Nancy received a bill from a karaoke in Guangzhou as follows: Required: Calculate the business tax (BT) payable by the karaoke in respect of the bill received by Nancy. Note: In Guangzhou, the business tax rate for the entertainment industry is 15% and for the food and beverages industry is 5%.

案例分析题Hit Ltd, a company set up in Suzhou in 2008

案例分析题Moon Ltds accounting profit before tax for the year 2017 is RMB620,000 and its turnover is RMB12,300,000. Except where stated otherwise, the following items have been included when computing the accounting profit before tax: (1) Entertainment expenses of RMB120,000 incurred in 2017. (2) Marketing and promotion expenses of RMB1,000,000 incurred in 2017. Excess marketing expenses brought forward from 2016, and not deducted in arriving at the accounting profit for the year 2017, are RMB350,000. (3) Research and development (RD) expenses of RMB160,000. Moon Ltd qualified as a small-medium sized technology enterprise and can enjoy the additional tax incentive on RD expenses. (4) Handicapped employees salaries of RMB200,000. (5) Qualified work safety equipment at a cost of RMB150,000. (6) A fine of RMB17,800 issued by the trademark bureau for infringement of a trademark. (7) Staff welfare expenses of RMB461,000. Total salaries incurred were RMB4,000,000. (8) The cost of lost inventory of RMB450,000, due to the warehouse being destroyed in a fire during the year, and insurance compensation received of RMB430,000. (9) A special provision for doubtful debts of RMB121,000. (10) A bad debt written off of RMB32,000 as the debtor declared bankruptcy. (11) A specific purpose government subsidy received of RMB350,000 and related costs incurred of RMB310,000. (12) A general purpose government subsidy received of RMB428,000. (13) An amount owed by Moon Ltd of RMB4,000 written off to income as the creditor ceased trading. (14) Interest income on treasury bonds of RMB8,000. (15) Bank interest income of RMB16,500. (16) A value added tax (VAT) refund on export of goods for RMB768,000. (17) Dividend income from a Vietnam subsidiary of RMB90,000 (gross dividend of RMB100,000, Vietnam tax paid RMB10,000). (18) Dividend income from a China subsidiary of RMB30,000 (profit before tax of the China subsidiary was RMB40,000 and enterprise income tax (EIT) paid of RMB10,000). (19) Profit on the sale of A-shares of RMB60,500. (20) A donation paid to the China Red Cross for RMB100,000. Required: Calculate the enterprise income tax (EIT) payable by Moon Ltd for the year 2017, assuming that Moon Ltd has made all relevant applications and reports to the tax authorities. Notes: 1. You should start your computation with the profit before tax figure of RMB620,000 and list all of the items (1) to (20) as referred to in the question, identifying any item which does not require adjustment for tax purposes by the use of zero (0). 2. You are not required to make adjustments for any of the above items for accounting purposes.