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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