Solution – Assignment # 2 - AC215

Taxation of Companies & Other Entities

Question 1: Crocodile Hunters Limited

Net trading income = K 1,980,000

Interest received from Marco Bank = K 112,000
Taxable income = K 2,092,000
Less: Gross dividend received = K 475,000
Taxable income = K 1,617,000
Company tax rate x 35%___
Gross tax applicable = K 565,950
Less: Credit/Rebate on gross dividend
(25% of K485,000) = K 118,750 (ii)
Tax applicable = K 447,200 (i)

Credit entitlement
K 475,000.00 x 17% = K80,750
-K80,750.00 - Dividend Withholding Tax Credit (iii)
K 394,250.00 - Net dividend (iv)

Question 2: Big Foot Trading

K366,700.40 / 83% = K405,663.13 - Gross dividend - (i)

K405,663.13
x 17%_
K68,962.73 = Dividend Withholding Tax payable - (ii)

(iii). K405,663.13
x 25%_
K101,415.78 Credit/Rebate entitlement

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PWhyne 2020