ATTEMPT ANY TWO QUESTIONS $($MAF $941$ ADVANCED TAXUTION$)$

QUESTION ONE

The "DOOK PROFIT" is the accourting proft found in the income statemert as asthorkes in the arrual tax return. For the two prefts, that is$,$ "DOCK PROFIT" and $"$ TAX PRCHit' fours; Gve at least two reasons why the two proff figures thould be the same in pricciple. Give at least two reasons why the two proft figures would not be expected to be the same.

$($Total:$10$ marks$)$

QUESTION TWO

The effective tax rate $($ETR$)$ is one important performance measure for the tas department. ETR is also used to measure tax avoidance betavisur, whether aggressive or otherwise.

Required:

Eplain the une of ETR as an appropriate performance measurement tool for the tar department as well as $\backslash ($ k $\backslash )($ETR$)$ being used as a tool for measuring tax avidanct behaviour

QUESTION THREE

The foliowing details are given for a multinational Corporation $($MNC$),$ Lima Fic which has two subsidiaries each located in offerent country. The two subsidiaries of Lime are Lita and Mata.

Required

Demonstrate how using each of the following: Transfer Pticing; Internal debt and Location of an intangible asset, would reduce Uma's total tax bili. $(10$ marks$)$

QUESTION FOUR

You have been approached by a chicf executive officer of a multinational corporation $($MNC$)$ who is sobking your opinion on whether to irsource the corporation's tax function. The MNC is currently outsourcing its tax function. Write a report eplaining the components of the tax function and the advantages and disadvantages of inscurcing and outsourcing a corporation's tax function