2016年ACCA F6(CHN)考試真題及答案「完整版」
Question:
Taip Ltd is a foreign investment enterprise which has been a qualified software enterprise for enterprise incometax(EIT) since its inception in 2010. Taip Ltd produces software products in Mainland China and exports these products to associated companies in the Hong Kong Special Administrative Region for further sale to European customers. Taip Ltd‘s total costs, profits/(losses) and applicable tax rates are summarised below：
In 2015 the tax authorities conducted a transfer pricing audit and concluded that Taip Ltd should adjust its profit based on a mark-up of 10% on total costs for all five years, 2010 to 2014.
Required：
(a)List the four methods (other than cost plus) which the tax authorities can use for transfer pricing adjustments.
Note：No mark will be given for stating ‘other method’.
(b)Calculate the total amount of additional enterprise income tax (EIT) payable by Taip Ltd for the years 2010 to 2014 inclusive.
Answer：
Taip Ltd
(a)In addition to the cost plus method, the following four methods can be used for transfer pricing adjustments：
-Comparable uncontrolled price method
-Resale price method
-Transactional net profit method
-Profit split method
(b)Additional enterprise income tax (EIT) payable for the years 2010 to 2014
Question:
Trinity Ltd is a production and trading company which sells cosmetics. In 2015 Trinity Ltd carried out the following transactions (except where stated otherwise, the amounts are exclusive of value added tax (VAT))：
(1)Imported 10,000 cosmetic packs from France at a cost including freight and insurance (CIF) of USD100,000. The French supplier granted Trinity Ltd an early settlement discount of 2%. Trinity Ltd sold 8,000 of the imported cosmetic packs to a sole distribution agent, Beast Co, for RMB2,350,000. Trinity Ltd granted Beast Co an early settlement discount of RMB50,000.
(2)Purchased lipsticks from a manufacturer for RMB400,000. The manufacturer paid consumption tax on the production and sale of the lipsticks. The lipsticks were exported to a Vietnam customer for USD300,000.
(3)Purchased chemicals for RMB85,000 for use in the production of face powder. The total turnover from the sale of the face powder in 2015 was RMB250,000. The unsold inventory of face powder at 31 December 2015 had a cost of RMB150,000.
(4)Purchased 1, 000 eyeliners for RMB10,000. All these eyeliners were given to customers as free gifts. The retail price of each eyeliner is RMB30 (VAT inclusive)。
Required：
Calculate the following amounts payable by Trinity Ltd for 2015：
(a)The customs duty and consumption tax on the importation of the cosmetic packs.
Notes：
1. The customs duty rate on cosmetics is 6·5%。
2. The consumption tax rate on cosmetics is 30%。
(b)The export value added tax (VAT) refundable on the lipsticks.
Note：The VAT refund rate for lipsticks is 13%。
(c)The consumption tax on the production and sale of the face powder.
(d)The total output VAT and total input/import VAT credit as a result of transactions (1) to (4). State zero (0) for any transaction(s) which do not have a VAT impact.
Answer：
Trinity Ltd
(a)Cosmetic packs
Customs duty = (USD100，000 x 6.5% x 6)= RMB39，000
Composite value for consumption tax = ((100，000 x 6 + 39，000)÷(1-30%))= RMB912，857
Consumption tax on importation = (912，857 x 30%) = RMB273，857
(b)Lipsticks
VAT refundable on export = (400，000 x 13%) = RMB52，000
(c)Face powder
Consumption tax on production and sale = (250，000 x 30%) = RMB75，000
Question:
(a)State ANY TWO major differences between a direct tax and an indirect tax.
(b)State two direct taxes and two indirect taxes levied in China.
(c)In January 2014 Tee Ltd received approval from the local tax bureau on a tax exemption application. The amount of tax which was exempt for 2014 amounted to RMB5 million. In December 2015 the tax bureau found that it had made a wrong decision.
Required:
State,with reason(s),whether the tax bureau can require Tee Ltd to pay back the amount of tax previously exempt. (2 marks)
(d)State whether the tax authorities can impose each of the following administrative actions on taxpayers:
(i)imprisonment;
(ii)stop a tax refund on exports;
(iii)stop providing VAT special invoices;
(iv)force the closure of the business of the taxpayer.
Note:
You are not required to give any reasons.
(e)Briefly explain the method the tax bureau will normally use to impose enterprise income tax on a company which has lost all of its accounting records due to a fire.
Answer:
(a)Differences between direct and indirect taxes
- A direct tax is usually levied on income or wealth of a person while an indirect tax is usually levied on the consumption of goods and services.
- The payer of a direct tax bears the tax directly and it is more difficult to shift the tax burden to another person.
- A direct tax is usually simpler to administer whereas an indirect tax is usually more complicated to administer.
- A direct tax is usually progressive whereas an indirect tax is usually regressive.
(b)Direct taxes:
- Individual income tax
- Enterprise income tax
Indirect taxes (any TWO):
- Value added tax
- Business tax
- Consumption tax
(c)The tax bureau can recover the tax wrongly exempt in 2014.
The tax bureau can recover any taxes under-collected as a result of a wrong decision made within three years;
and for under-collected amounts over RMB100,000 the time limit is extended to five years.
(d)(i)No. [Imprisonment is a criminal penalty and can only be decided by a court]
(ii)Yes.
(iii)Yes.
(iv)No. [This is the authority of the State Administration for Industry and Commerce]
(e)The tax bureau can assess the enterprise income tax on a deemed basis by reference to the tax burden of other taxpayers involved in the same or similar industries with a similar scale of operations and a similar level of revenue.
Question:
(a)Design Ltd provides computer design services to overseas clients. The company‘s accountant has informed the chief executive officer that there are three alternative value added tax (VAT)policies which Design Ltd can choose to adopt:
(1)Taxable
(2)Zero rated
(3)VAT exempt
The following items from Design Ltd‘s budget for 2016 are relevant to its VAT position:
RMB
Amount expected to be collected from overseas clients in 2016 9,805,000
New computers to be purchased in January 2016 with an expected
useful life of three years with no scrap value. This amount is VAT inclusive
and the supplier is a VAT general taxpayer who can provide a VAT special invoice 3,500,000
Other service expenses in 2016. This amount is VAT inclusive and VAT
special invoices at 6% can be obtained for all items 210,000
Required:
Assuming that there are no other transactions, costs or expenses in the year 2016, for each of the three alternative value added tax (VAT)policies available to Design Ltd:
(i)Calculate the amount of VAT payable or refundable for the year 2016. (4 marks)
(ii)Calculate the gross profit for the year 2016. (5 marks)
(b)State ONE major reason for the tax reform of merging business tax into value added tax.
Answer:
(a)Design Ltd
(b)Major reasons for the merger of business tax and value added tax (VAT)are:
- Reduce the tax burden by eliminating double taxation,
- Encourage capital (fixed assets)investment by service industries.
Question:
(a)Mrs Li had the following sources of income in the year 2015:
(1)She won a prize of RMB876,000 from the Sports Lottery.
(2)She received an insurance compensation of RMB60,000 from a medical and life policy. She had paid a premium of RMB40,000 for this policy.
(3)She placed RMB150,000 on a time deposit account with a bank for six months and received interest at the rate of 6% per annum.
(4)She received a villa from her husband as part of their divorce settlement. The villa had cost RMB5,000,000 and is currently valued at RMB9,500,000.
(5)She had invested in SH Petro, an A-share listed company, in 2010 and in October 2015 received a dividend of RMB5,000 from this company.
(6)She sold the shares in her personal company to a foreign investor and received RMB8,000,000 for agreeing not to compete in the same business for three years.
Required:
Calculate the individual income tax (IIT)payable by Mrs Li on each of her items of income (1)to (6)for 2015. Clearly identify any item(s)which are not taxable as either 'tax exempt' or 'not subject to IIT'.
Note: Ignore value added tax and business tax.
(b)Ms Wu is an expatriate working and living in Guangzhou. Her remuneration package for 2015 is as follows:
Required:
Calculate the total individual income tax (IIT)payable by Ms Wu on her employment income for 2015 on the assumption that Ms Wu qualifies for all possible tax incentives allowable under the IIT rules.
(c)Mr Huang is a China tax resident who has to file an annual individual income tax (IIT)return for 2015. His income and IIT withholding status for 2015 are as follows:
Required:
Calculate the individual income tax (IIT)which Mr Huang has to pay on filing his annual IIT return for 2015.
Note: Because the rental income is less than RMB30,000 per month it is exempt from value added tax/business tax.
Answer:
(a)Mrs Li - Individual income tax (IIT)for 2015
(1)Sports lottery prize: (876,000 x 20%)= RMB175,200
Tutorial note: A prize of RMB10,000 or less is exempt from IIT.
(2)Insurance compensation: exempt from IIT. [Article 4, IIT Law]
(3)Interest on time deposit with a bank: temporarily exempt from IIT.
(4)Villa received from a divorce: not subject to IIT. [Tax notice Guo Shui Fa (2009)No. 121]
(5)Dividend from a listed company on shares held for over one year: temporarily exempt from IIT.
[Tax notice Cai Shui (2015)No. 101]
(6)Non-competition payment: (8,000,000 x 20%)= RMB1,600,000
Tutorial note: Taxed as incidental income according to tax notice Caishui (2007)No. 102.
(b)Ms Wu - IIT on employment income for 2015
Tutorial notes:
- Reasonable amount of housing allowances and meal allowances received on a reimbursement basis by an expatriate are exempt from IIT provided the relevant supporting documents are available.
- Only one bonus can use the special formula to calculate IIT and the other bonuses will be added to the salary of the month to calculate IIT.
- Since Ms Wu lives in Guangzhou, she is not qualified for the tax exemption for tuition fees for her children studying in Hong Kong, based on tax notice Caishui [2004] No. 29.
(c)Mr Huang - IIT on filing the annual return for 2015
Question:
(a)GFH Ltd,a manufacturing company set up in Xi'an,produces and sells integrated circuits to an overseas associated company. It has not applied for the tax incentives for integrated circuits enterprises. GFH Ltd's statement of profit or loss for the year ended 31 December 2015 is as follows:
The following information is relevant to the items charged/credited in the above statement of profit or loss:
(1)The accountant has used the last in,first out (LIFO)method to value the inventories. If the first in,first out(FIFO)method were used,the cost of goods sold would have been reduced by RMB350,100.
(2)The increase in the provision for obsolete inventory was RMB123,450.
(3)A piece of equipment with a net book value of RMB80,000 was scrapped for nil proceeds.
(4)RMB1,000,000 was paid to a senior production manager in lieu of notice for early dismissal.
(5)In 2014,an antique vase was bought for RMB3,500,000 and put in the CEO's room for display. A ten-year economic life without scrap value has been used to calculate depreciation on this asset.
(6)Research and development expenses of RMB123,000 were incurred for a project which qualifies for an additional tax deduction.
(7)The salaries of the disabled employees hired by GFH Ltd in 2015 were RMB345,120. This cost qualified for the tax incentive.
(8)A donation of RMB25,000 was made to some students of a remote school.
(9)Interest at the rate of 25% per annum was paid on a loan of RMB8,000,000 from a finance institution in Xi'an. The interest rate of the People's Bank of China was 5%.
(10)Entertainment expenses incurred were RMB5,210,200.
(11)GFH Ltd acquired a new business in 2013 and paid RMB6,500,000 for the business' goodwill. This goodwill is being amortised over a period of ten years.
(12)GFH Ltd acquired a patent from another company in 2014 and paid a fee of RMB3,200,000. This patent fee is being amortised over a period of ten years.
(13)The dividend payable to the shareholder of GFH Ltd of RMB1,200,000 was treated as part of costs and expenses.
(14)Newly acquired equipment costing RMB2,500,000 qualifies under the Safety Production Special Equipment Catalogue.
(15)A warehouse was destroyed by a flood. The loss incurred of RMB150,000 was not covered by insurance.
(16)Irrecoverable input value added tax (VAT)on an abnormal loss amounted to RMB119,000.
(17)A subsidy of RMB3,000,000 was received from the Xi'an government for a specific project in 2013. The project was completed in 2015 and the amount spent on the project totalled RMB2,789,500. The balance of RMB210,500 was treated as income of 2015.
(18)GFH Ltd has granted an associated company in Vietnam the right to use its technology. The royalty income received of RMB90,000 was after the deduction of 10% Vietnamese withholding tax.
(19)GFH Ltd invested in an associated company in India in 2010. The profit of RMB123,100 is the proportion of the associate company's profit attributable to GFH Ltd and is included in its consolidated accounts. GFH Ltd pays enterprise income tax (EIT)at the standard rate.
Required:
Calculate the enterprise income tax (EIT)payable by GFH Ltd for the year 2015,assuming that GFH Ltd has made all the relevant applications.
Note: You should start your computation with the net profit figure of RMB2,590,400 and list all of the items referred to in notes (1)to (19)identifying any items which do not require adjustment by the use of zero (0).
(b)The company's accountant has proposed that GFH Ltd should apply for the following enterprise income tax (EIT)
incentives for the year 2015:
(1)a qualified integrated circuit enterprise; and
(2)an encouraged industry under the Central and Western catalogue.
Required:
State the preferential treatments available under each of these two enterprise income tax (EIT)incentives.
Answer:
GFH Ltd
(a)Enterprise income tax (EIT)for 2015
(b)Preferential treatments available
(1)Qualified integrated circuit enterprise: a two-year exemption and three-year half rate of EIT starting from the first profit making year.
(2)Encouraged industry under the Central and Western catalogue: 15% tax rate until the end of 2020.
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