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https://opentuition.com/topic/bpp-revision-kit-afm-q-9-lamri/
Hi, as discussed in the replies above, please may I know why Lamri still needs to pay an additional corporation tax of 14% (as seen in sample answer part (b) 1st paragraph), since Strymon has already been taxed at 42%, and Lamri will therefore get full credit for such tax already paid?
Thank you.
You are misreading the answer.
It is not that Lamri will actually be charged an extra 14%. It is saying that because Strymon will have had to pay tax at a rate 14% more than Lamri pays on its own profits, then effectively Lamri will be getting less than they would have got if they had earned those profits – it is effectively as though they have ended up paying 14% more.
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