CIMA F1 Exam Questions in PDF and Online - Page: 4

QUESTION: 16

Mr AM is the owner of Waxco Ltd. Mr AM was born in India, but currently resides in the US

He has gained dual Indian and American citizenship.
Mr AM first registered Waxco Ltd in the USA when he started the company ten years ago. However, because of lower costs, the company moved its central management station to Germany two years ago. Waxco Ltd has other smaller offices such as call centres across Asia, in locations such as Pakistan and Cambodia, however Waxco Ltd only currently sell goods in the US
Which of the countries mentioned are relevant for determining Waxco Ltd's competent jurisdiction?
The USA
Germany
India
Pakistan
Cambodia

Answer(s): A,B

Entity RH has an recognised a taxable profit of $1.Smillion for 20X1'. In Entity RH's resident country. Country M, depreciation charges and entertaining expenses are disallowed expenses. Below is some information on Entitry RH's outgoings for the period:
Depreciation charged on PPE: $450,000
Political donations: $155,000
Staff parties: $3,200
Cost of updating assets: $10,000
Other expenses: $83,500
In Country M, there is a standard corporation tax of 12% charged on all corporation profits.
What is Entity RH's total tax liability for this period?

$234,384
$125,616
$254,184
$252,984

Answer(s): A

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QUESTION: 18

Entity T operates within several countries, but its country of residence is Country F. In 20X5, Entity T made $8.4 million in Country M. Country M has a flat rate corporation tax of 5.9%. Country F and Country M operate a double taxation treaty which uses a foreign tax credit system. In Country F, there is a tax of 10% tax on all foreign income. Taking into account the credit, what is the total tax liability that Entity T owes on its Country M income, in Country F?