Question: You and your team have been selected by your employer to offer Consultancy services to your company client, Mr Chinyama on the tax treatment of
- You and your team have been selected by your employer to offer Consultancy services to your company client, Mr Chinyama on the tax treatment of the following investments.
K
Royalties for Patent held by him 12,000
Interest from ABSA deposit account 42,000
Consultancy Fees 225,000
Dividend from BATA Shoe Company (Gross) 55,000
Note:
- BATA Shoe Company is not yet registered with LuSE at the time of dividend declaration.
- Unless otherwise stated, the amounts shown are received amounts
Required:
With suitable explanations, calculate how much each of the amounts received by Mr Chinyama should be dealt with in the computation of his Income Tax payable for the charge year 2019/20.
- Aaron and Moses are in Partnership preparing accounts to 31 December every year. On 1 October 2020,Adam joined the Partnership as a new member and the agreement was changed accordingly.
The Partnership agreement has been as follows:
Aaron Moses Adam
Period up to 30 September 2020
Annual Salary 360,000 240,000
Share of Balance 1 3
Period from 1 October 2020
Annual Salary 120,000 220,000 192,000
Share of Balance 3 2 2
The partnership`s taxable profit for the year ended 31 December 2020 was K220,000.
Required:
Show how the Partnership profit for the year ended 31 December 2020 will be shared by the three partners and calculate the income tax payable by each partner .(Zambian tax system)
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