Get premium membership and access questions with answers, video lessons as well as revision papers.
Tax free employment benefits
- Medical services provided by an employer for full time employees, and non-whole time service director (but only up to a maximum of ksh. 1,000,000 per annum for the latter.
- Employer’s contribution to a pension or provident fund. However with effect from 1st July 2004 employees of organizations not chargeable to tax will be liable to tax on contribution the employer makes to an unregistered fund or on the excess contribution to a registered fund
- Payment by an employer of education fees of an employee’s dependents’ or relatives if taxed on the fund.
- International passage costs paid by an employer for citizen employee recruited outside Kenya
- Qualifying fringe benefits
- Benefits valued at a sum of up to kshs. 36,000 form year of 2006.
Wilfykil answered the question on February 26, 2019 at 05:54
- Define the term 'tax planning'(Solved)
Define the term 'tax planning'
Date posted: February 26, 2019. Answers (1)
- Write brief notes on Exempt interest income(Solved)
Write brief notes on Exempt interest income
Date posted: February 26, 2019. Answers (1)
- Write brief notes on Fringe benefit tax
(Solved)
Write brief notes on Fringe benefit tax
Date posted: February 26, 2019. Answers (1)
- Starlit company Ltd. has been operating in Kenya Since 1 January 2003. The company is a subsidiary of Mega Holdings Ltd. which is used on...(Solved)
Starlit company Ltd. has been operating in Kenya Since 1 January 2003. The company is a subsidiary of Mega Holdings Ltd. which is used on the United Kingdom.
The financial statements of Starlit Company Ltd. for the year ended 31 December 2005 are presented below.
Date posted: February 26, 2019. Answers (1)
- Related companies may understate their taxable profits by engaging in transfer pricing. With reference to Section 18 (3) of the Income Tax Act (Cap. 470),...(Solved)
Related companies may understate their taxable profits by engaging in transfer pricing. With reference to Section 18 (3) of the Income Tax Act (Cap. 470), briefly explain three transactions that may constitute transfer pricing."
Date posted: February 26, 2019. Answers (1)
- Explain the methods applied in adjusting transfer prices.(Solved)
Explain the methods applied in adjusting transfer prices.
Date posted: February 26, 2019. Answers (1)
- Explain the meaning of transfer pricing?(Solved)
Explain the meaning of transfer pricing?
Date posted: February 26, 2019. Answers (1)
- Kamere Ltd. commenced manufacturing operations on 1 January 2003. The management of the company has prepared the following financial statement for the year ended 31...(Solved)
Kamere Ltd. commenced manufacturing operations on 1 January 2003. The management of the company has prepared the following financial statement for the year ended 31 December 2005.
Balance sheet as at 31 December 2005
Additional information:
1. Non-current assets are stated net of depreciation including for year 2005. It is the policy of the company to charge depreciation at 20 % per annum on a straight line method.
2. The company has not claimed capital allowance since it commenced operations.
3. The company's reported taxable profits for the year ended 31 December 2003 and 2004 were sh.8,000,000 andsh.6,400,000 respectively
4. Factory building includes an extension to the factory constructed at a cost of sh. 1,600,000 which was put into use on I January
5. Machinery include generator and conveyor belts bought for sh. 1,400,000 and sh. 800,000 respectively.
6. Motor vehicles include a forklift purchased in 2003 at sh. 1,160,000.
7. A saloon car purchased in year 2004 at sh. 1,200,000 was disposed of during the year 2005 for sh. 600,000 no adjustment have been made to record this disposal.
8. The loan was received on 1 January 2005 and is subject to interest at the rate of 8% per annum
Required:
i) Capital allowances due to Kamere Ltd. for each of the three years ended 31 December 2003 , 2004, and 2005
ii) Adjusted taxable profit or loss for the company in each of the three years above.
Date posted: February 26, 2019. Answers (1)
- The Kenya Revenue Authority ("KRA") is geared towards a function-based organization rather than one structured along the types of taxes. This is evidenced by the...(Solved)
The Kenya Revenue Authority ("KRA") is geared towards a function-based organization rather than one structured along the types of taxes. This is evidenced by the integration of VAT, Income Tax and Excise departments into the Domestic Department. Asses the likely benefits and drawbacks to KRA arising from this integration
Date posted: February 26, 2019. Answers (1)
- Fruit farm Ltd. produces pineapple juice for sale in both local and export markets. The company owns plantations in Sagan which supply pineapples to the...(Solved)
Fruit farm Ltd. produces pineapple juice for sale in both local and export markets. The company owns plantations in Sagan which supply pineapples to the processing factory located in Thika.
The following is a summary of the company’s income statement for the year ended 31 December 2006.
Required:
i) Capital allowances due to Fruit farm Ltd. for the year ended 31 December 2006
ii) Adjusted taxable profit or loss for the year to 31 December 2006.
Date posted: February 26, 2019. Answers (1)
- The following information relates to ABC Ltd. for the year ended 31 December 2006.(Solved)
The following information relates to ABC Ltd. for the year ended 31 December 2006.
- Profit before tax sh. 4,000,000
- Import duty refunded by the authority sh. 400,000
- Dividend distributed by .ABC Ltd. sh. 8,800,000
- Dividend distributed by ABC Ltd. Sh. 3,000,000
- Corporation tax rate 30%.
Required:
Compensating tax payable by ABC Ltd. for the year ended 31 December 2006.
Date posted: February 26, 2019. Answers (1)
- The following information was extracted from the books of Faida Ltd. for the year ended 31 December 2006(Solved)
The following information was extracted from the books of Faida Ltd. for the year ended 31 December 2006
- Profit before tax sh. 400,000
- Import duty refunded by tax authority sh. 400,000
- Dividend distributed by Faida Ltd. sh. 8,800,000.
- Dividend received by Faida Ltd. sh 3,000,000
The rate of corporation tax is 30%
Required:
Compensating tax payable by Faida Ltd. for the year ended 31 December 2006
Date posted: February 26, 2019. Answers (1)
- Primark Ltd. manufactures a variety of goods for the local market. The company commenced operations on 2 January 2006. The following is an extract from...(Solved)
Primark Ltd. manufactures a variety of goods for the local market. The company commenced operations on 2 January 2006. The following is an extract from the company's balance sheet as at 31 December 2006
Required:
i) Capital allowances due to Primark Ltd. for the year ended 31 December 2007.
ii) Tax payable by the company (if any) for the year ended 31 December 2007.
Date posted: February 25, 2019. Answers (1)
- Ann Mwajuma runs a small business in Kisii town. The revenue authority has asked her to submit a self assessment return for the year ended...(Solved)
Ann Mwajuma runs a small business in Kisii town. The revenue authority has asked her to submit a self assessment return for the year ended 31 December 2008
However, Ann Mwajuma did not maintain complete accounting records for the year ended 31 December 2008. She has therefore requested you to assist her and has provided you with the following information:
1. Opening and closing balances of assets and liabilities were as follows for the year ended 31 December 2008:
Date posted: February 25, 2019. Answers (1)
- Mr. Felix Madzeke is a citizen of Malawi but has been residing and conducting business in your country since 2005. However, he was not aware...(Solved)
Mr. Felix Madzeke is a citizen of Malawi but has been residing and conducting business in your country since 2005. However, he was not aware of the requirements to maintain proper records and submitting regular assessment to the revenue authority.
An inspection conducted by the revenue authority on his business and personal transactions over past four years revealed the following:
Assets and liabilities (business and personal) as at:
Date posted: February 25, 2019. Answers (1)
- Revelation Traders Ltd. started its operations on 1 January 2007. The following trial balance was extracted from the books of the company as at 31...(Solved)
Revelation Traders Ltd. started its operations on 1 January 2007. The following trial balance was extracted from the books of the company as at 31 December 2008:
Date posted: February 25, 2019. Answers (1)
- Briefly explain the procedure to be followed when an error on past returns is discovered either by the tax payer or commissioner for Domestic Taxes.(Solved)
Briefly explain the procedure to be followed when an error on past returns is discovered either by the tax payer or commissioner for Domestic Taxes.
Date posted: February 25, 2019. Answers (1)
- Fahari Limited, a company making various leather products, commenced operation on 1 January 2009. The following information relate to the assets that the company purchased...(Solved)
Fahari Limited, a company making various leather products, commenced operation on 1 January 2009. The following information relate to the assets that the company purchased or constructed before commencement of operations
Date posted: February 25, 2019. Answers (1)
- What should individuals and corporates put in mind to mitigate their tax exposure or avoid being taxed unfairly?(Solved)
What should individuals and corporates put in mind to mitigate their tax exposure or avoid being taxed unfairly?
Date posted: February 25, 2019. Answers (1)
- How can corporates avoid taxes?(Solved)
How can corporates avoid taxes?
Date posted: February 25, 2019. Answers (1)