1. PEAK Equipment Limited is a company resident in Trinidad and Tobago.

Its
primary business is the retail of electrical supplies. It was incorporated in Trinidad
and Tobago in 2012 and has been in operation since. For the year ended 31 st
December 2018 its Statement of Comprehensive Income was as follows:

Income: $ $
Dividend Income 200,000
Gross Sales 3,500,000
Cost of Sales (1,500,000)
2,000,000
Capital Gain 5,000
2,205,000
Expenses:
Salaries and Wages 1,000,000
Depreciation 200,000
Motor Vehicle Fuel 100,000
and Maintenance
Sponsorships 100,000
Entertainment 150,000
Interest 50,000
Bad Debts 40,000
Utilities 60,000
Advertising 100,000
1,800,000
NET PROFIT 405,000

Notes to accounts:
a. Dividend Income relates to dividends the company has received from a local
subsidiary.
b. The carried forward balances of its wear and tear allowances pool as at 1 st
January 2018 are as follows:
Class A-$600,000
Class B-$440,000
Class C-$90,000
 On 1st May 2018 the company purchased computer equipment of $60,000 which
it treated as a pool C asset.
 In addition, on 1st December 2018 the company disposed of a motor vehicle
which it had acquired in 2014 at a cost of $250,000 for $40,000. The motor
 vehicle was a pool B asset. The capital gain of $5,000 was recognized in the
statement of comprehensive income under the line item indicating such.
c. Sponsorships comprise:
o Donation to an employee of $20,000 to assist with medical expenses.
o The balance is a sponsorship of a video production which was an
entirely local production related to the education of the general public in
the use of alternative energy.
d. Interest comprises the sum of $10,000 which relates to the interest and penalty
paid on the late remittance of PAYE whilst the balance relates to the interest
accrued on a related party debt obligation where the loan proceeds were
utilized in the financing of the business operations.
e. Bad debts expense relates to a general provision based on an estimate of the
percentage of its debtors balance it believes are likely to become bad.
f. The entertainment expense is all relates to business entertainment.
g. The company has made Corporation Tax quarterly installments of $22,500 for
each quarter and Green Fund Levy installments of $2,900 for each quarter.

REQUIRED:

A. Calculate the Corporation Tax Liability of PEAK Rentals Limited for the
2018 year of income and determine if it has a payable or refundable with
respect to Corporation Tax, Business Levy and Green Fund Levy. (18
marks)
B. A director of the company has indicated that during 2019 it is
contemplating engaging the services of a Singapore resident to provide
training to its staff over a 3-day period. The service provider has no place
of business in Trinidad and Tobago. The training will be conducted
exclusively in Trinidad and the fee for the service would be $60,000. There
is no tax treaty between Trinidad and Singapore.
Discuss the deductibility of this item of expenditure and whether there
would be any withholding tax implications. (7 marks)