REVISION QUESTION 4 CT

Funfair Co. is a Cyprus tax resident company which has been trading in Cyprus for many years.
The company results for the year 2019 were as follows:

Trading profit per the company accounts before tax and after losses is €1,000,000 and after (included) being
debited or credited with the following:

Royalties received € 70,000 taxable

Rents Received (€1,000 actual exps not incl) € 45,000 taxable (45,000 -1000=44,000)
Gross deposit Interest investment € 33,000 SCD
Dividends received (net) € 12,000 SCD
Trading Interest Income € 15,000 trading income taxable
Expenses of saloon Car € 10,000 add them back not ded

On 1st January 2019 the company owned the following assets: Calculate
DEPN CAs
COST CAs
Building Factory 4% (not incl land) € 200,000 …….. ….. purchased 1//12015 8,000
Building Shop(incl. land €20,000) 3% € 100,000 ……. ….. Purchased 1/1/2013 SOLD
Furniture 10% € 22,000 ........ ….. purchased 1/1/2014 2,200
Computer Hardware (20%) € 10,000 …….. ….. purchased 1/1/2015 2,000
Motor Vehicles (van) 20% € 25,000 …….. ….. purchased 1/1/2016 5,000
Motor Vehicles (saloon) € 60,000 …….. ….. purchased 1/1/2017NOT
ALLOWED

The shop was sold 31 12 2019 for € 260,000 (inclusive of land 60,000)

Capital Allowances Rates:

Factory building 4% 25 YEARS

Building -shop 3% 33 YEARS
Furniture 10% 10 YEARS
Computers 20% 5 YEARS
Vehicles -van 20% 5 YEARS

Company losses b/f €320,000

The dividend was received on 30.06.2019
Temporary tax paid € 95,000

Required:
Calculate the Corporation Tax Liability(Show calculation of Adjusted Profit) Prepare CT Computation of the
company for the year ended 31 December 2019
Assume depreciation and capital allowances are the same. Calculate CAs and depreciation for 2019.
Do not prepare Profit on sale of assets and Balancing Statements.

CT COMPUTATION
€
Profit as per accounts 1,000,000
Add back losses 320,000+
Add Back saloon exps 10,000+

Less actual exps rent (1,000)-

Add back depreciation 19,600

Less: CAs (17,200)

Less Interest on deposits (33,000)-

Less dividends received (12,000)-

Adjusted Profit 1,286,400

Less losses b/f (320,000)
PCTCT
966,400

CT 12.5% 120,800

Less temporary tax paid (95,000)

CT payable 25,800
There is no 10% penalty since more than 75% of tax was paid

On 1st January 2019 the company owned the following assets: Calculate
Depreciation
Acc Year Acc
COST 1.1.19 2019 31.12.19
Building factory(4%)(excl. land €20,000)€200,000(25yrs)32,0008000 40,000 Purchased 1/1/2015
Building shop (3%) €80,000 (33yrs) 14,400 2,400 16,800 sold 31.12.19 – 12m depn
Furniture (10%) € 22,000 (10yrs) 11,000 2,200 13,200 purchased 1/1/2014
Computer Hardware (20%) € 10,000 (5 yrs) 8,000 2,000 10,000 purchased 1/1/2015

Motor Vehicles (van) 20% € 25,000 (5 yrs) 15,000 5,000 20,000 purchased 1/1/2016

TOTAL DEPN 19,600

On 1st January 2019 the company owned the following assets: Calculate
Capital Allowances
Acc Year Acc
COST 1.1.19 2019 31.12.19
Building factory(4%)(excl. land €20,000)€200,000(25yrs)32,0008000 40,000 Purchased 1/1/2015
Building shop (3%) €80,000 (33yrs) 14,400 …… 14,400 sold 31.12.19 – no CA
Furniture (10%) € 22,000 (10yrs) 11,000 2,200 13,200 purchased 1/1/2014
Computer Hardware (20%) € 10,000 (5 yrs) 8,000 2,000 10,000 purchased 1/1/2015

Motor Vehicles (van) 20% € 25,000 (5 yrs) 15,000 5,000 20,000 purchased 1/1/2016

TOTAL CAs 17,200