Tax and Zakat Accounting (ACCT 422)
Question Description
Assignment Question(s):
Q1. Depreciation rates used in financial accounting shall not be used in tax accounting whereas tax law gives tax credits to tax payers by using accelerated depreciation rates for some groups of assets
.
Required: State depreciation rates under the Article 17 of the Saudi Income.
Answer:
(Answer in your own words DO NOT copy from the Law).
Q2. The paragraph (e) in the article 17 of the Saudi income tax explained how depreciation expense is calculated for any group of assets.
Required:
- Discuss In Detail This Article
- Give a numerical example explaining the applicability of the paragraph (e) in the article 17 of the Saudi income tax.
Answer:
(Answer in your own words DO NOT copy from the Law).
Q3. Resident Bank fully owned by Sweden investors has the following selected items drawn from its accounting books (Amounts in Saudi Riyal)
|
Account |
Amount |
Deductible |
Non-deductible |
|
Allowance For Loan Losses |
840,000 |
||
|
Employees share in retirement fund. |
190,000 |
||
|
Bad debt (written off) |
18,340 |
||
|
Donations to the Help the Poor Organization (non-licensed in Saudi) |
11,350 |
||
|
Depreciation for New computers purchased to be used on research and development |
35,100 |
||
|
Old employees reunion party expenses |
3,000 |
||
|
Bank share in retirement fund within the limit in the law. |
145,000 |
||
|
Loss on denoted assets |
8,000 |
||
|
Income tax paid to tax and zakat authority |
150,000 |
Required: check mark items in the table below either deductible or non-deductible under income tax law in the kingdom.
Answer:
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