100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
TAX3701 Answers Assignment 1 (701239) Semester 2 2023 - Multiple Choice Question Assignment R50,00
Add to cart

Exam (elaborations)

TAX3701 Answers Assignment 1 (701239) Semester 2 2023 - Multiple Choice Question Assignment

 33 views  0 purchase

TAX3701 Answers Assignment 1 () Semester 2 2023 - Multiple Choice Question Assignment

Preview 3 out of 20  pages

  • August 2, 2023
  • 20
  • 2023/2024
  • Exam (elaborations)
  • Questions & answers
All documents for this subject (106)
avatar-seller
TutorSammy
TAX3701 | ASSIGNMENT 1 | SEMESTER 2 2023| CODE: 701239 | ANSWERS
WITH EXPLANATIONS FOR EACH ANSWER!




TAX3701
Taxation of Business Activities




TAX3701 | ASSIGNMENT 1 | SEMESTER 2 2023| CODE: 701239 |
ANSWERS WITH EXPLANATIONS!

,Question 1
Siyavuya (Pty) Ltd is a South African resident company that provides
electronic gadgets repair services. The company provides its employees with
free lunch meals on a daily basis. The total value of meals provided during
January and February 2023 amounts to R8,900 (excluding VAT).
What is the input tax on the value of the free lunch meals provided to
employees during the two months period ended 28 February 2023?
a. R1 335
b. Rnil - denied supply
c. Rnil - exempt supply
d. Rnil - zero rated supply
Answer B: Rnil - denied supply.
Explanation: According to South African VAT laws, employers cannot claim input tax
credits for the provision of meals or refreshments to employees, hence the input tax
on these meals is Rnil.


Question 2: How may turnover tax be calculated?

a. Gross dividends received by virtue of shares held in another company
b. Proceeds received from suppliers in respect of returned goods
c. South African receipts that are revenue in nature
d. Half of the profits made from the disposal of fixed assets

Answer C: South African receipts that are revenue in nature.
Explanation: Turnover tax in South Africa is calculated based on the total amount of
a company's revenue receipts, simplifying the tax process especially for small
businesses.


Question 3: Just-in-time (Pty) Ltd (‘JIT’) is a South African resident company
that operates in the manufacturing industry. The company produces luxurious
office desks for distribution to clients in and around South Africa. JIT is
registered as a category B vendor for Value-Added Tax (VAT) purposes and is
making 75% taxable supplies. All amounts exclude VAT unless stated
otherwise.
The following information relates to JIT’s transactions for the two-months
period ended 30 April 2023:

, On 20 March 2023, JIT imported 15 improved quality office desks from a
renowned supplier situated in Germany. The cost
price of the office desks was R10 800 per office desk and the value for
customs duty purposes was R10 500 per office desk.
Non-refundable import surcharges of R1 250 were charged on the transaction.
The date reflected on the Customs Billing of
Entry is 8 April 2023.
The VAT payable/refundable to JIT for the two-months period ended 30 April
2023 is:
For Just-in-time (Pty) Ltd, what is the VAT payable/refundable for the two-
months period ended 30 April 2023?
a. R22 761 payable
b. R26 174 refundable
c. R23 813 refundable
d. R26 850 payable
Answer C: R23,813 refundable.
Explanation: This amount is calculated by determining the VAT on the imported
office desks and factoring in the percentage of taxable supplies (75%) made by the
company. VAT paid by a company on its purchases can be claimed back as
refundable.


Question 4: Various court cases have tested the practical application of the
principles of s11(a), the general deduction formula. Which one of the following
is one of the most notable court cases?
a. Caltex Oil (SA) Ltd V SIR 37 SATC 1) v (actually incurred)
b. Port Elizabeth Electric Tramway Co Ltd v CIR 8 SATC 13 (in the production of
income)
c. Joffe & Co (Pty) Ltd v CIR 13 SATC 354 (expenditure and losses)
d. All stated court cases
Answer B and C: Port Elizabeth Electric Tramway Co Ltd v CIR and Joffe & Co (Pty)
Ltd v CIR.
Explanation: These cases have established precedents for the interpretation of the
principles of the general deduction formula under Section 11(a) of the Income Tax
Act in South Africa.

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying this summary from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller TutorSammy. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy this summary for R50,00. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

53068 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy summaries for 14 years now

Start selling
R50,00
  • (0)
Add to cart
Added