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Good day Sir,
I have a question concerning part b-i — in comparing my answer to the examiner’s answer, I noted a slight difference and so I wish for you to shed some light.
In treating with the bi-lateral treaty, I noticed that he subjected the entire operating profits $5.6M to an additional 5% tax. I do get why there is a tax difference payable but my question is why wasn’t 80% of that amount subject to additional tax since only 80% of the profits are remitted to Lirio as dividends?
I agree with you and I would have done that.
Provided it is clear in your workings what you are doing, you would get full marks (even though obviously the figures would be different).
If you are ever unsure then just state your assumption. Many many P4 questions have more than one answer depending on the assumptions, and still can still get full marks even if the examiner assumed different in his answer.
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