Stella-VD Company Limited, manufacturers of fruit juice for local consumption commenced business on 1/10/2017, with accounting year-end at 31 December. The company submitted its accounts for 2017 and was assessed accordingly. The company submitted its tax returns for 2018 year of assessment to the Ghana Revenue Authority on 30/04/2019. Below are the details:

.     

Required:
a) Compute the appropriate capital allowance for 2017 and 2018 year of assessment.   (8 marks)

b) Calculate the chargeable income of the company for assessment year 2018.  (12 marks)

Zealow Ltd, a car battery dealer holds 26% voting power of Aboye Ltd, an energy and power distribution company. Both companies are resident in Ghana. Aboye Ltd declared dividend and the portion of dividend that should be credited to the accounts of Zealow Ltd is GH¢78,900.

Required:
Determine the taxes payable if any and comment on the treatment of dividend to Zealow Ltd. (5 marks)

Explain briefly the taxation rules governing research and development expenses.                                                           (4 marks)

Valentine Ghana Limited is a producer of love greeting cards and the following was extracted from its financial statements for the year ended 31 December, 2018.

The following additional information are relevant:
i) Capital allowances for the year was GH¢204,000 as agreed with Ghana Revenue Authority (GRA).
ii) The figures for repairs and maintenance include an amount of GH¢33,150 being cost of erecting a new gate to the factory.
iii) 50% of other income was the personal rental income of the Managing Director.
iv) One third of vehicle running expenses was expended on the personal car of the Managing Director, used for the company’s operation based on the company’s policy.
Required:
Calculate the chargeable income of Valentine Ghana Limited for 2018 Year of Assessment.                                           (8 marks)