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Summary TAX3701
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- University Of South Africa (Unisa)
TAXATION OF BUSINESS - TAX3701
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Dashboard / Courses / UNISA / 2023 / Semester 1 / TAX3701-23-S1 / Welcome Message / Assessment 1
Question 1
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Blenko (Pty) Ltd ("Blenko") is a company incorporated in South Africa and has a 30 June 2023 year end. During the 2023 financial year,
Blenko incurred the following expenditure:
Legal fees to draft employment contracts for permanent employees R300 000
Salaries and wages R500 000
Interest on loan used to purchase shares in Reload (Pty) Ltd R150 000
Painting costs for painting the company director's house R21 000
Inventory costs amounting to R321 000, payable only in July 2023
Question
The expenditure deductible for the 2023 year of assessment amounts to:
A. R1 271 000
B. R1 142 000
C. R1 292 000
D. R1 121 000
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Question 2
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Scenario
Dashboard / Courses / UNISA / 2023 / Semester 1 / TAX3701-23-S1 / Welcome Message / Assessment 1
Sisonke (Pty) Ltd (“Sisonke”) is a South African resident company based in the Mpumalanga province. The company specialises in
manufacturing and selling electrical appliances within and outside of South Africa. Sisonke is registered for Value-Added Tax on the invoice
basis and has a 30 June financial year-end. The company makes 97% taxable supplies.
The following information relates to Sisonke’s income and expenditure for the two-months ended 30 April 2023. All amounts include VAT
unless stated otherwise.
The total sales for the two-months ended 30 April 2023 amounted to R1 346 080. Included in this amount is sales amounting to R205 000
(excluding VAT) made to non-resident customers while the customers were not physically present in South Africa.
On 8 March 2023, Sisonke purchased a brand-new delivery truck for a total amount of R402 000 including finance charges amounting to
R88 000. On 15 March 2023, the delivery truck got hijacked while on its way to deliver a double door fridge to a customer. Fleet Insurers
Ltd advanced R384 000 to Sisonke as a full payment for the loss of the delivery truck. Appliance Insurers (Pty) Ltd replaced the double
door fridge with a similar fridge that had a market value of R38 000. The cost of the fridge that was stolen with the delivery truck
amounted to R29 000 and its open market value on 15 March 2023 was R36 000.
On 20 March 2023, a used office desk was purchased from Mr Sorjal for R9 000. Mr Sorjal is a non-vendor residing in Johannesburg,
South Africa. The open market value of the office desk was determined as R8 200 on 20 March 2023.
The following expenses appeared on Sisonke’s bank statement for the two months ended 30 April 2023:
Date Description Amount
2 March 2023 Bank charges R1 230
27 March 2023 Interest on bank overdraft (note a) R5 200
5 April 2023 Return flight ticket to Canada (note b) R32 780
16 April 2023 Karaoke system (note c) R16 800
Notes:
(a) The bank overdraft was used to finance Sisonke’s day-to-day business expenditure.
(b) The return flight ticket was purchased for Sisonke’s technician who had to travel to Canada to attend a business conference.
(c) The karaoke system was purchased for installation in Sisonke’s canteen so that employees can enjoy good music when having their
meals.
A five-seater Toyota Corolla was purchased for R276 000 (excluding VAT) on 31 March 2023. On 1 April 2023, the five-seater Toyota
Corolla was given to Sisonke’s managing director for use as a company car. The managing director bears the full costs of fuel and
maintenance of the car. The fuel costs for the month of April 2023 amounted to R5 060.
On 17 April 2023, Sisonke sold an expresso machine for R8 500 to Latte Limited. Latte Limited purchased the expresso machine to replace
the damaged coffee machine that was used by employees during their tea break. Sisonke holds a 15% interest in the shares and voting
rights of Latte Limited. The open-market value of the expresso machine was R14 000 on 17 April 2023.
Question:
What is the VAT payable on the sales made to South African resident customers?
A. R170 308
B. R144 826
C. R148 837
D. R195 855
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Question 3
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Scenario
Dashboard / Courses / UNISA / 2023 / Semester 1 / TAX3701-23-S1 / Welcome Message / Assessment 1
Sisonke (Pty) Ltd (“Sisonke”) is a South African resident company based in the Mpumalanga province. The company specialises in
manufacturing and selling electrical appliances within and outside of South Africa. Sisonke is registered for Value-Added Tax on the invoice
basis and has a 30 June financial year-end. The company makes 97% taxable supplies.
The following information relates to Sisonke’s income and expenditure for the two-months ended 30 April 2023. All amounts include VAT
unless stated otherwise.
The total sales for the two-months ended 30 April 2023 amounted to R1 346 080. Included in this amount is sales amounting to R205 000
(excluding VAT) made to non-resident customers while the customers were not physically present in South Africa.
On 8 March 2023, Sisonke purchased a brand-new delivery truck for a total amount of R402 000 including finance charges amounting to
R88 000. On 15 March 2023, the delivery truck got hijacked while on its way to deliver a double door fridge to a customer. Fleet Insurers
Ltd advanced R384 000 to Sisonke as a full payment for the loss of the delivery truck. Appliance Insurers (Pty) Ltd replaced the double
door fridge with a similar fridge that had a market value of R38 000. The cost of the fridge that was stolen with the delivery truck
amounted to R29 000 and its open market value on 15 March 2023 was R36 000.
On 20 March 2023, a used office desk was purchased from Mr Sorjal for R9 000. Mr Sorjal is a non-vendor residing in Johannesburg,
South Africa. The open market value of the office desk was determined as R8 200 on 20 March 2023.
The following expenses appeared on Sisonke’s bank statement for the two months ended 30 April 2023:
Date Description Amount
2 March 2023 Bank charges R1 230
27 March 2023 Interest on bank overdraft (note a) R5 200
5 April 2023 Return flight ticket to Canada (note b) R32 780
16 April 2023 Karaoke system (note c) R16 800
Notes:
(a) The bank overdraft was used to finance Sisonke’s day-to-day business expenditure.
(b) The return flight ticket was purchased for Sisonke’s technician who had to travel to Canada to attend a business conference.
(c) The karaoke system was purchased for installation in Sisonke’s canteen so that employees can enjoy good music when having their
meals.
A five-seater Toyota Corolla was purchased for R276 000 (excluding VAT) on 31 March 2023. On 1 April 2023, the five-seater Toyota
Corolla was given to Sisonke’s managing director for use as a company car. The managing director bears the full costs of fuel and
maintenance of the car. The fuel costs for the month of April 2023 amounted to R5 060.
On 17 April 2023, Sisonke sold an expresso machine for R8 500 to Latte Limited. Latte Limited purchased the expresso machine to replace
the damaged coffee machine that was used by employees during their tea break. Sisonke holds a 15% interest in the shares and voting
rights of Latte Limited. The open-market value of the expresso machine was R14 000 on 17 April 2023.
Question:
What is the VAT payable on sales made to non-resident customers?
A. Rnil - sales made to non-resident customers constitute zero rated supplies
B. Rnil - sales made to non-resident customers constitute exempt supplies
C. R29 828
D. R26 739
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