QUESTION 3

QUESTION 3 - OVERSEAS INCOME TAXATION (A) A PNG Company awarded a contract to a foreign company. The Contract Price K 750,000. Calculate Foreign Contractors Withholding Tax for the year 2022. (B) PNG Subsidiary Company has paid Management Fees to PNG Foreign Company (parent company) K 200,000. Sales Income K 8,000,000 and Allowable deductions except management fees K 4,500,000. Calculate Allowable Management Fees and also Management fees withholding tax. (3 Marks) (C) PNG Company has paid royalty for the use of intellectual property of other companies. (A) Royalty paid to resident company K50,000 (B) Royalty paid to overseas associate company K100,000 (C) Royalty paid to not an associated company, overseas K40,000, tax returns filled and declaring expenses K32,000 related to royalty. Required to calculate Royalty Withholding tax. (4 Marks) (D) Freight charged by overseas shipping company at Port Moresby Port K 100,000 for carrying goods to overseas. Required to calculate the tax liability. (1.5 Marks)