2016/Jun Q1 b(i)

This topic has 3 replies, 2 voices, and was last updated 8 years ago by John Moffat.

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November 9, 2017 at 12:18 am #414922
weijiang
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Hi Sir or Ma’am
In the past paper 2016/Jun Q1 b (1) I wonder why we calculate the additional tax due to the tax rate difference from the overseas subsidiary company Pontac , that we didnot base on the shareholding percentage80%. But took the whole PATx additional tax rate?

Thanks
November 9, 2017 at 9:10 am #414959
John Moffat
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It is not the shareholding percentage that is 80% – it is 100%.
It is just that Pontac is paying 80% of its profits as dividends (and retaining the rest).

The question says that tax is payable on the profits (not on the dividends remitted).
November 9, 2017 at 5:38 pm #415016
weijiang
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Thank you for the answer it cleared My question.
What if it holds 80% of the shareholding from the subsidiary company, does it mean the mother company will pay 80% of the additional tax?
November 10, 2017 at 8:38 am #415057
John Moffat
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No. The individual companies are separate legal entities and pay their own tax. The consolidated accounts are to provide more useful information, but there is no extra company in law.
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