Question
Tawheed Corp disclosed its annual income for the year 2022 with net income of (KD) 37500. Upon receiving its tax declaration, tax inspection has been
Tawheed Corp disclosed its annual income for the year 2022 with net income of (KD) 37500. Upon receiving its tax declaration, tax inspection has been conducted and resulted in the following: 1. Since 2019, straight line depreciation has been applied on the factory machinery that was acquired in 10th of Nov. 2018 for 410520 and estimated life of 12 years as well as salvage value of 53750. However, the company changed to accelerated depreciation in Dec. 2021. 1. The income statement showed pledges and charitable donations of 27050 while the allowable amount is 1% of net income max. 1. Among the operating expenses give aways costing 12624. 1. Paid rents include 75 days for the period from Jan. 1st, 2023. The monthly rent is 11250. 1. Overseas operation income (KD41110) of the company has not been reported alongside. 1. Around 5430 of unrecognized profit has been added to taxable income. 1. Allowances are exceeding averages by 0.75% of A/R. The customer base of the company is KD 213570. Required. 1. Prepare the tax inspection proforma of Drill Co. for the year 2022? 1. As per Kuwait tax legislation, determine the tax liability of Tawheed Co. If the tax rate is based on a progressive bracket for each 100000 of net income an increase of 7% tax rate? 1. Similarly, if the tax base is regressive starting with 40% on the first 200000, then reduced by 6% for every 75000 of added income? 1. Calculate the tax liability based on a proportional tax rating of 18.5%?
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