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Why the additional tax of 10% is done on the sales revenue but not on the profit after tax ?
It is because for every $ that the revenue increases, the profit before tax will increase by the same amount as the revenue increases.
Hello, in this question, in year 1 there is a tax loss off $12.2m, but there is no mention as to whether the loss can be set off against other operations, as it is a multinational. and if we do set off the loss, tax benefit will be for the additional tax of 10% or 30%, or should we set off against future profits from subsidiary’s operations only?
I don’t know how you are arriving at your tax loss. Have you checked your answer against the printed answer?
Ok, its breakeven. Got it. But if there was a loss, examiner will mention in scenario how to adjust it right?
Thanks 🙂
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