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BPP Revision Kit Q.9 Lamri

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › BPP Revision Kit Q.9 Lamri

  • This topic has 1 reply, 2 voices, and was last updated 3 months ago by John Moffat.
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  • May 14, 2022 at 7:47 am #655613
    Ron123
    • Topics: 57
    • Replies: 73
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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.

    May 14, 2022 at 9:26 am #655625
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 50010
    • ☆☆☆☆☆

    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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