NOTE: Use Trinidad and Tobago Tax Laws
3. Red Dragon Limited is a company resident in Trinidad and Tobago engaged in the business of a martial arts school. Its parent company is Dragon Holdings Limited which is resident in Trinidad and Tobago. Silver Fox International, a company resident in Thailand owns a 15% equity interest in Red Dragon Limited. On the 20th June, 2022, Red Dragon Limited is holding an international martial arts tournament at its headquarters in Chaguanas, Trinidad and has secured the services of the renowned Bruce Leeds, a resident of South Korea, to perform at the show. The parties have entered into a contract for the performance of Bruce Leeds. He is to be paid the sum of $150,000 net of local taxes and shall be paid by wire transfer on the 1st July, 2022. Bruce Leeds shall be in Trinidad for 3 days. In order to secure the services of Bruce Leeds, Red Dragon Limited engaged the services of Bolo Young, an agent resident in Hong Kong who conducted the arrangements with Bruce Leeds and Red Dragon Limited in Thailand. His fees for services amounted to $30,000 and he was paid on the 1st May 2022. Red Dragon Limited has declared an ordinary dividend of $25,000 per 1% of equity owned in the company payable on the 1st August, 2022. There are no Double Taxation Treaty arrangements between Trinidad and Tobago and Thailand or Trinidad and Tobago and South Korea. Required: Discuss the withholding tax implications with respect to: a. The contract between Red Dragon Limited and Bruce Leeds. (10 marks) b. The contract between Red Dragon Limited and Bolo Young. (10 marks) c. The payment of the Ordinary Share Dividend on the 1st August 2022. (5 marks) Reference must be made to the relevant statutory provisions and case law. 3. Red Dragon Limited is a company resident in Trinidad and Tobago engaged in the business of a martial arts school. Its parent company is Dragon Holdings Limited which is resident in Trinidad and Tobago. Silver Fox International, a company resident in Thailand owns a 15% equity interest in Red Dragon Limited. On the 20th June, 2022, Red Dragon Limited is holding an international martial arts tournament at its headquarters in Chaguanas, Trinidad and has secured the services of the renowned Bruce Leeds, a resident of South Korea, to perform at the show. The parties have entered into a contract for the performance of Bruce Leeds. He is to be paid the sum of $150,000 net of local taxes and shall be paid by wire transfer on the 1st July, 2022. Bruce Leeds shall be in Trinidad for 3 days. In order to secure the services of Bruce Leeds, Red Dragon Limited engaged the services of Bolo Young, an agent resident in Hong Kong who conducted the arrangements with Bruce Leeds and Red Dragon Limited in Thailand. His fees for services amounted to $30,000 and he was paid on the 1st May 2022. Red Dragon Limited has declared an ordinary dividend of $25,000 per 1% of equity owned in the company payable on the 1st August, 2022. There are no Double Taxation Treaty arrangements between Trinidad and Tobago and Thailand or Trinidad and Tobago and South Korea. Required: Discuss the withholding tax implications with respect to: a. The contract between Red Dragon Limited and Bruce Leeds. (10 marks) b. The contract between Red Dragon Limited and Bolo Young. (10 marks) c. The payment of the Ordinary Share Dividend on the 1st August 2022. (5 marks) Reference must be made to the relevant statutory provisions and case law
