T AXAT ION
Pr a ct ica l
T axat ion
What is chal l enging t o doing
annual t ax r et ur n?
M at ch i n g B ook r ecor d i n t o Tax for m ?
Tax for m or t em plat e n ot clear ly u n der st an d ?
A ccou n t code n ot w ell i n li n e w i t h t ax li st d ow n ?
T axat ion
Working in Spreadsheet Converting data into
Profit & loss sheet
Converting data Grouping or comparing
into Balance Sheet account code with Tax
References
T AXAT ION
Step 1 - 3
1- Entity Information:
- Entity Name, Branches, VAT Registration…..
2- Capital investment in report date
- Capital registered
- Capital/Share loss
3- Employment information in period
- Manager or director is shareholder
- Manager or Director is not shareholder
- Total Employees – Worker
- Total Employees – Worker taxable
T OI
Step 4
4- Balance sheet/ Financial Position:
I- Assets
- Fixed Assets: A1 – A12
- Current Assets: A14-A27
II- Capital & Liability
- Capital/Equity: A30 – A36
- Long term Liability: A38-A41
- Short term Liability: A43-A52
T OI
Step 5
Profit and Loss/ Financial Statement:
I- INCOMES:
- Gross Income: B1 – B6
- Subsidy Incomes: B9-B11
- Other Incomes: B13-B21
II- EXPENSES:
- Operation Expenses: B23 – B41
- Profit/Loss on Operation: (B42= B7+B8+B12-B22)
- Profit/Loss before Tax: (B46= B42-B43-B44-B45)
- Tax on income: B47 (for NGOs income not taxable, need to prepare letter to
exception)
T OI
Step 6
Cost Of Goods for Manufacturing:
I-Total Raw materials & Purchased for manufacturing: (C4= C1+C3)
II- Raw Materials and supplied used: (C6 = C4-C5)
III- Other purchase in Manufacturing: (C7= C8+C14)
IV- Total purchase in Manufacturing: (C17= C6+C7+C15-C16)
V- TUTAL Finish Goods Sold: (C20= C17+C18-C19)
T OI
Step 7
Cost Of Goods Sold (Non-Manufacturing):
I- Beginning Stock: D1
II- Purchase in period: D2
III-Total Other purchase for sell: (D3= D4:D6)
IV- TOTAL Cost of goods sold purchased: (D7 = D1+D2+D3)
V- TOTAL Cost of goods sold: (D9= D7-D8)
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Step 8
Table of calculation on ToI:
I- Profit/Loss before tax: E1 = B46
II- Total Deductible expenses: (E18 =E2:E17)
III-Add- Income tax but not recorded in accounting: (E25 = E19:E24)
IV- Deduct- Income recorded in account but not taxable in year: (E35= E32:E34)
V- Net profit/loss after period: (E36=E1+E18+E25-E31-E35)
T OI
Step 9
Table of calculation on Charity/Donation:
I- Profit/Loss before tax: F1 = E36
II- Expense on Charity/Donation = F2
III-Income for calculation for Charity/Donation deductible: (F3 = F1+F2)
IV- Expenses allowable on Charity/Donation: (F4= F3 x 5%)
V- Spend allowable on Charity in period: (F5= F4 or F2 which amount lower)
VI- Spend on Charity non-allowable add back/ Loss taxable (F6 = F2 – F5)
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Step 9
Table of calculation on Interest Expenses:
I- Profit/Loss before interest spent: G1 = E38
II- Add: Interest expenses in the period = G2
III- Less: Interest earned in the period G3
IV- Total income without interest earned: (G4= G1 – G3 & G4 always >=0)
V- 50% of Net income without interest earned: (G5= G4 x 50%)
VI- Interest earned in period (G6 = G3)
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Step 9
Table of follow up on Interest Carry Forwards:
I- Year N to Year N-5
Table of Loss carry forward allowable
I- Year N to Year N-5
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Step 10
Depreciation according to Taxation law:
I- Depreciation on intangible assets
II- Depreciation on Agriculture & Raw materials
III- Depreciation on tangible assets
IV- Depreciation on fixed assets (Class 2 to Class 4)
- Class 2 (depre 50%): for Computer, electronics device, Set up company cost.
- Class 3 (depre. 25%): for Equipment, tool, furniture and fixture,
- Class 4 (depre. 20%): for Vehicle
T HANK YOU!
For the children, and the world they dream of.