TAXATION I : TUTORIAL 11th March 2021

 MGMT Ltd is a Trinidad and Tobago resident company. In order to expand its business
into global markets it has entered into a contract with Osaka Advisers, a company
resident in Japan for Osaka Advisors to prepare a feasibility study report, with all work
related to contract being performed within Trinidad and Tobago at a consideration of
$100,000. Personnel of Osaka Advisors would be in Trinidad for a period of one month
and during this period, all work under the contract would be performed. There is no
Taxation Treaty between Trinidad and Tobago and Japan. MGMT has also entered into
a contract with British Technologies, a company resident in the United Kingdom. Under
this contract, British Technologies is to repair certain equipment of MGMT at a cost of
$125,000. The equipment needed to be repaired was shipped to British Technologies
at its London office and all the repair work is to undergo in London. The Taxation Treaty
between Trinidad and Tobago and the United Kingdom provides for a withholding tax
of 10% on payments for technical services.

You are the tax advisor of MGMT Ltd, and it wants your advice on:
 The withholding tax implications on both contracts. (9 marks)
 If any withholding tax is due under the contract, when should this payment be remitted
to the Board of Inland Revenue and what are the consequences if this payment is made
late. (3 marks)
 MGMT Ltd is owned 75% by a Lagos Holdings, a company resident in Nigeria. It wishes
to pay a net dividend (gross payment less withholding tax) to Lagos Holdings, its parent
company of $25,000. What is the withholding tax due on this payment? There is no
Taxation Treaty between Trinidad and Tobago and Nigeria (3 marks)