Page 45 - F1 Integrated Workbook STUDENT 2018

Corporrate Incoome Tax and Cappital Tax Computations

Exxampple 5

In the previouus examplees we havee used a coonstant ratte of tax to o calculate the
tax payable, ee.g. 30%. HHowever, ssometimess the tax raate may change durinng
the year and ttherefore ttaxable proofits will neeed to be prorated. Foor tax
purrposes proffits are asssumed to bbe accruedd evenly.

Usiing the exxamples 1 to 4, recaalculate the tax if thee rates weere as
folllows:

01/04/X0 – 311//03/X1 = 28%

01/04/X1 – 311/03/X2 = 330%

Sollution

Thee taxable pprofit for Zipppy was $444,300 for accounting period too 31/12/X1.

Taxx would bee:

($444,300 × 33/12 × 28%%) + ($44,3000 × 9/12 × 30%) = $$13,068.500

Thee taxable pprofit is proo-rated bassed on the amount off months thhat fall intoo
eacch of the taax rate periods, i.e.

01/01/X1 – 311/03/X1 = 33 months aat the rate of 28%

01/04/X1 – 311/12/X1 = 99 months aat the rate of 30%

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