2. Oman Refineries and Petrochemical Company has provided following information: > During the year 2019 a net profit of the company is estimated to be OMR 150,000. > The accountant of the company is not aware of the taxation rules in Oman and charged flat 15% depreciation on the following assets: (a) Permanent Building 50,000 (b) Prefabricated Buildings 100,000 (c) Pipelines, Platforms & Permanent Ways 20,000 (d) Equipment & Tools 30,000 (e) Research and Development Tools & Setup 5,000 > Heavy equipment's are valued to be OMR 300,000 where a depreciation of 20% is charged during the year. > No contribution with regards to employees is recorded in the books where the employees information of the company is as follows: (a) 120 Omani employees are working with the company where total salary paid to them is OMR 120,000. (b) 18 expatriates are working with the company and a total salary of OMR 18,000 is paid per year to them. > Land worth OMR 30,000 is purchased in the year 2016 to construct office building in Muscat. Construction of the building with a total cost of OMR 50,000 is completed in the current year and the inauguration of the building is done on 1" Jan, 2020. The office building will be fully functional from 15" Jan, 2020. In this regards the accounted charged a depreciation of 15% on the Land and 20% on the construction cost of the building. Requirement i. Calculate Taxable Income of the company for the year 2019. ii. Calculate the Tax Liability of the company for the year 2019. SCL Case Studies On Oman Taxation Laws 1. Mohammed Al Abri is not aware of Oman Tax Laws and prepared his final accounts. He declared a profit of OMR 55,385 for the year ending 31" Dec, 2019. He provided the following additional information from his books: During the year a pick-up vehicle is purchased for business purposes worth OMR 2,400 was treated as expenses along with its registration charges worth OMR 100. the investment purpose during the year 2019. Accountant charged a depreciation of 10% on it. > Mohammed provided OMR 9,000 as a donation for poor children's education in Oman during the year where the gross income of his business for the year is OMR 160,000. With regards to social security premium, Mohammed has deducted an amount of OMR 5,000 from current year's profits which represents 10% of total salary paid to the Omani employees working within the organization. He is not charging any amount from the Omani employees in this regards. > Mohammed purchases furniture worth OMR 400 for his personal use and included in the books as general expenses. Regarding bad debts, his has lot of confusion and considered a recovered bad debt of previous year as incurred bad debt for current year in the books worth OMR 500. Mohammed purchased a professional camera worth OMR 3,000 and gifted it to his son on his birth day, which was included in the Tools & Equipment of the business. There are three expatriate employees working for the business for which he considered vocational training levy of OMR 50 each in his books. In the year 2018 there was a fire accident in the work shop and a damage of OMR 12,000 is clamed from the books. But in the current year insurance company compensated the total amount which was not included in the current year's profits. Mohammed incurred a loss of OMR 2,000 and OMR 2.200 in the years 2013 and 2014 for which he did not pass any entry in the subsequent year. Requirement Calculate taxable income and tax liability from the above information. 2. Oman Refineries and Petrochemical Company has provided following information: > During the year 2019 a net profit of the company is estimated to be OMR 150,000. > The accountant of the company is not aware of the taxation rules in Oman and charged flat 15% depreciation on the following assets: (a) Permanent Building 50,000 (b) Prefabricated Buildings 100,000 (c) Pipelines, Platforms & Permanent Ways 20,000 (d) Equipment & Tools 30,000 (e) Research and Development Tools & Setup 5,000 > Heavy equipment's are valued to be OMR 300,000 where a depreciation of 20% is charged during the year. > No contribution with regards to employees is recorded in the books where the employees information of the company is as follows: (a) 120 Omani employees are working with the company where total salary paid to them is OMR 120,000. (b) 18 expatriates are working with the company and a total salary of OMR 18,000 is paid per year to them. > Land worth OMR 30,000 is purchased in the year 2016 to construct office building in Muscat. Construction of the building with a total cost of OMR 50,000 is completed in the current year and the inauguration of the building is done on 1" Jan, 2020. The office building will be fully functional from 15" Jan, 2020. In this regards the accounted charged a depreciation of 15% on the Land and 20% on the construction cost of the building. Requirement i. Calculate Taxable Income of the company for the year 2019. ii. Calculate the Tax Liability of the company for the year 2019. SCL Case Studies On Oman Taxation Laws 1. Mohammed Al Abri is not aware of Oman Tax Laws and prepared his final accounts. He declared a profit of OMR 55,385 for the year ending 31" Dec, 2019. He provided the following additional information from his books: During the year a pick-up vehicle is purchased for business purposes worth OMR 2,400 was treated as expenses along with its registration charges worth OMR 100. the investment purpose during the year 2019. Accountant charged a depreciation of 10% on it. > Mohammed provided OMR 9,000 as a donation for poor children's education in Oman during the year where the gross income of his business for the year is OMR 160,000. With regards to social security premium, Mohammed has deducted an amount of OMR 5,000 from current year's profits which represents 10% of total salary paid to the Omani employees working within the organization. He is not charging any amount from the Omani employees in this regards. > Mohammed purchases furniture worth OMR 400 for his personal use and included in the books as general expenses. Regarding bad debts, his has lot of confusion and considered a recovered bad debt of previous year as incurred bad debt for current year in the books worth OMR 500. Mohammed purchased a professional camera worth OMR 3,000 and gifted it to his son on his birth day, which was included in the Tools & Equipment of the business. There are three expatriate employees working for the business for which he considered vocational training levy of OMR 50 each in his books. In the year 2018 there was a fire accident in the work shop and a damage of OMR 12,000 is clamed from the books. But in the current year insurance company compensated the total amount which was not included in the current year's profits. Mohammed incurred a loss of OMR 2,000 and OMR 2.200 in the years 2013 and 2014 for which he did not pass any entry in the subsequent year. Requirement Calculate taxable income and tax liability from the above information