10:27 N. (6) Explain giving reasons, whether Lameck will be regarded as being resident and ordinarily resident in Zambia in the tax year 2019. (4 marks) () Explain whether any of the income earned by Latuck in the tax year 2019, will be chargeable to tax in Zambia, calculating the amount of income tax payable, if any (16 marks) QUESTION THREE JHK Ltd is a Zambian resident manufacturing company. The company is registered for Value Added Tax (VAT) and sells its products to both VAT registered and non-VAT registered customers in Zambia. The company is owned by a group of investors from a country known as Dambia. The company's Managing Director wants to know how VAT is administered in Zambia In particular, he wants advice on: Wheter VAT can be accomted for on receipts basis instead of the normal invoice basis. (1) Whether it is compulsory or optional to register for VAT The following is an extract from the management accounts of the company for the month of September 2018 K Sales revenue 190,500 Cost of sales (102,300) Gross profit 88,200 Expenses Salaries and wages (20.000) General overheads (16,124) Other operating expenses (47,705) Net profit for the year 4,371 Additional information (1) JHK Ltd manufactures both taxable and exempt supplies Exempt supplies represent 20% of the total sales revenue, while the remainder represents standard-rated supplies. The sales made to non- VAT registered customers amounted to 30% of the standard-rated supplies (2) Included in the cost of sales are purchases amounting to K86,955, of which K16,955 are exempt purchases, while the balance are all standard-rated supplies. The purchases made from non-VAT registered suppliers amotinted to 25% of the standard-rated (3) General overheads are all standard rated and are VAT inclusive. (4) Other operating expenses (VAT inclusive) comprise K Internet services 4,640 Telephone expenses 3.509 Entertainment expenses 17,632 Diesel for company utility vehicles 7.540 Petrol for company pool cars 4,408 Motor vehicle maintenance expenses 6,612 . III 10:27 PON. (3) General overheads are all standard rated and are VAT MUSIve (4) Other operating expenses (VAT inclusive) comprise K Intenet services 4,640 Telephone expenses 3,509 Entertainment expenses 17,632 Diesel for company utility vehicles 7.540 Petrol for company pool cars 4.108 Motor vehicle matitenance expenses 6,612 Utility bills in connection with Managing Director's accommodation 3 364 47,705 (5) The company acquired the fixtures & fittings at a cost of K16,240 (VAT inclusive) and manufacturing equipment at a cost of K46,400 (VAT inclusive) during September 2018. Unless stated otherwise, all of the above figures are exclusive of VAT where appropriate Required: (a) Describe the cash accomming scheme and explain its advantages and disadvantages. (6 marcs) (6) Explain the circumstances under which a trader may voluntarily register for VAT (3 marks) (c) Calculate the VAT payable by JHK Lid for the month of September 2018. You must clearly indicate tising a zero (0) ench expense where mput VAT 15 irrecoverable. (16 marks) QUESTION OUR 1. Identify the different types of trusts (10 Marks) 2. Mwanaona bought a Toyota Allteza, Cylinder capacity is 1500cc from Japan on 1 March 2020. The purchase price of the car was US $3,500. Freight charges amounted to US$210 and insurance costs were US$315. Transport charges from Dar-el-Salnam to Nakonde were US$650. Incidental costs up to the border of Nakonde amounted to US$150 Mwana incurred further costs amounting to K1,500 for transportation from Nalconde to Lusaka K600 was incurred for registration on the date of acquisition of the Car the ruling Bank of Zambia exchange rate was K11.56 per US$1. And the Commssioner General's approved exchange rate was K10 20 per US$1 Required: Calculate the customs value for each bus and Import taxes Paid Mwamonn Logistics Ltd (15 Marks) MII 10:27 PON. (3) General overheads are all standard rated and are VAT MUSIve (4) Other operating expenses (VAT inclusive) comprise K Intenet services 4,640 Telephone expenses 3,509 Entertainment expenses 17,632 Diesel for company utility vehicles 7.540 Petrol for company pool cars 4.108 Motor vehicle matitenance expenses 6,612 Utility bills in connection with Managing Director's accommodation 3 364 47,705 (5) The company acquired the fixtures & fittings at a cost of K16,240 (VAT inclusive) and manufacturing equipment at a cost of K46,400 (VAT inclusive) during September 2018. Unless stated otherwise, all of the above figures are exclusive of VAT where appropriate Required: (a) Describe the cash accomming scheme and explain its advantages and disadvantages. (6 marcs) (6) Explain the circumstances under which a trader may voluntarily register for VAT (3 marks) (c) Calculate the VAT payable by JHK Lid for the month of September 2018. You must clearly indicate tising a zero (0) ench expense where mput VAT 15 irrecoverable. (16 marks) QUESTION OUR 1. Identify the different types of trusts (10 Marks) 2. Mwanaona bought a Toyota Allteza, Cylinder capacity is 1500cc from Japan on 1 March 2020. The purchase price of the car was US $3,500. Freight charges amounted to US$210 and insurance costs were US$315. Transport charges from Dar-el-Salnam to Nakonde were US$650. Incidental costs up to the border of Nakonde amounted to US$150 Mwana incurred further costs amounting to K1,500 for transportation from Nalconde to Lusaka K600 was incurred for registration on the date of acquisition of the Car the ruling Bank of Zambia exchange rate was K11.56 per US$1. And the Commssioner General's approved exchange rate was K10 20 per US$1 Required: Calculate the customs value for each bus and Import taxes Paid Mwamonn Logistics Ltd (15 Marks) MII 10:27 N. (6) Explain giving reasons, whether Lameck will be regarded as being resident and ordinarily resident in Zambia in the tax year 2019. (4 marks) () Explain whether any of the income earned by Latuck in the tax year 2019, will be chargeable to tax in Zambia, calculating the amount of income tax payable, if any (16 marks) QUESTION THREE JHK Ltd is a Zambian resident manufacturing company. The company is registered for Value Added Tax (VAT) and sells its products to both VAT registered and non-VAT registered customers in Zambia. The company is owned by a group of investors from a country known as Dambia. The company's Managing Director wants to know how VAT is administered in Zambia In particular, he wants advice on: Wheter VAT can be accomted for on receipts basis instead of the normal invoice basis. (1) Whether it is compulsory or optional to register for VAT The following is an extract from the management accounts of the company for the month of September 2018 K Sales revenue 190,500 Cost of sales (102,300) Gross profit 88,200 Expenses Salaries and wages (20.000) General overheads (16,124) Other operating expenses (47,705) Net profit for the year 4,371 Additional information (1) JHK Ltd manufactures both taxable and exempt supplies Exempt supplies represent 20% of the total sales revenue, while the remainder represents standard-rated supplies. The sales made to non- VAT registered customers amounted to 30% of the standard-rated supplies (2) Included in the cost of sales are purchases amounting to K86,955, of which K16,955 are exempt purchases, while the balance are all standard-rated supplies. The purchases made from non-VAT registered suppliers amotinted to 25% of the standard-rated (3) General overheads are all standard rated and are VAT inclusive. (4) Other operating expenses (VAT inclusive) comprise K Internet services 4,640 Telephone expenses 3.509 Entertainment expenses 17,632 Diesel for company utility vehicles 7.540 Petrol for company pool cars 4,408 Motor vehicle maintenance expenses 6,612 . III 10:27 PON. (3) General overheads are all standard rated and are VAT MUSIve (4) Other operating expenses (VAT inclusive) comprise K Intenet services 4,640 Telephone expenses 3,509 Entertainment expenses 17,632 Diesel for company utility vehicles 7.540 Petrol for company pool cars 4.108 Motor vehicle matitenance expenses 6,612 Utility bills in connection with Managing Director's accommodation 3 364 47,705 (5) The company acquired the fixtures & fittings at a cost of K16,240 (VAT inclusive) and manufacturing equipment at a cost of K46,400 (VAT inclusive) during September 2018. Unless stated otherwise, all of the above figures are exclusive of VAT where appropriate Required: (a) Describe the cash accomming scheme and explain its advantages and disadvantages. (6 marcs) (6) Explain the circumstances under which a trader may voluntarily register for VAT (3 marks) (c) Calculate the VAT payable by JHK Lid for the month of September 2018. You must clearly indicate tising a zero (0) ench expense where mput VAT 15 irrecoverable. (16 marks) QUESTION OUR 1. Identify the different types of trusts (10 Marks) 2. Mwanaona bought a Toyota Allteza, Cylinder capacity is 1500cc from Japan on 1 March 2020. The purchase price of the car was US $3,500. Freight charges amounted to US$210 and insurance costs were US$315. Transport charges from Dar-el-Salnam to Nakonde were US$650. Incidental costs up to the border of Nakonde amounted to US$150 Mwana incurred further costs amounting to K1,500 for transportation from Nalconde to Lusaka K600 was incurred for registration on the date of acquisition of the Car the ruling Bank of Zambia exchange rate was K11.56 per US$1. And the Commssioner General's approved exchange rate was K10 20 per US$1 Required: Calculate the customs value for each bus and Import taxes Paid Mwamonn Logistics Ltd (15 Marks) MII 10:27 PON. (3) General overheads are all standard rated and are VAT MUSIve (4) Other operating expenses (VAT inclusive) comprise K Intenet services 4,640 Telephone expenses 3,509 Entertainment expenses 17,632 Diesel for company utility vehicles 7.540 Petrol for company pool cars 4.108 Motor vehicle matitenance expenses 6,612 Utility bills in connection with Managing Director's accommodation 3 364 47,705 (5) The company acquired the fixtures & fittings at a cost of K16,240 (VAT inclusive) and manufacturing equipment at a cost of K46,400 (VAT inclusive) during September 2018. Unless stated otherwise, all of the above figures are exclusive of VAT where appropriate Required: (a) Describe the cash accomming scheme and explain its advantages and disadvantages. (6 marcs) (6) Explain the circumstances under which a trader may voluntarily register for VAT (3 marks) (c) Calculate the VAT payable by JHK Lid for the month of September 2018. You must clearly indicate tising a zero (0) ench expense where mput VAT 15 irrecoverable. (16 marks) QUESTION OUR 1. Identify the different types of trusts (10 Marks) 2. Mwanaona bought a Toyota Allteza, Cylinder capacity is 1500cc from Japan on 1 March 2020. The purchase price of the car was US $3,500. Freight charges amounted to US$210 and insurance costs were US$315. Transport charges from Dar-el-Salnam to Nakonde were US$650. Incidental costs up to the border of Nakonde amounted to US$150 Mwana incurred further costs amounting to K1,500 for transportation from Nalconde to Lusaka K600 was incurred for registration on the date of acquisition of the Car the ruling Bank of Zambia exchange rate was K11.56 per US$1. And the Commssioner General's approved exchange rate was K10 20 per US$1 Required: Calculate the customs value for each bus and Import taxes Paid Mwamonn Logistics Ltd (15 Marks) MII