Loss is generally considered a tax relief and
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter13: Corporations: Earning & Profits And Distributions
Section: Chapter Questions
Problem 13P
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12. Loss is generally considered a tax relief and can be carried forward to the following trading year and offset against the profit for that year. A company operating in Country A with the following tax loss rules.
i. There is no cap on the number of years for which losses may be carried forward.
ii. There is no cap is applicable for the first five years of assessment next following the year of assessment in which the taxpayers started a trade, business, or profession.
iii. There is no cap available where a taxpayer (whether individual or company) whose gross turnover is below $10,000,000 per annum.
iv. The deduction allowed for prior year losses (PYL) is 50 percent of the net income for the respective year.
In 2022, ABC Limited, a company registered in Country A, had a trading profit of $3,000,000. The company started business in 1997 and its gross revenue was $15,000,000 for the tax year. Prior year tax losses are $4,000,000. It's loss relief for that year is.
а.$2,000,000
b.$3,000,000
с. $1,000,000
d.$1,500,000
Transcribed Image Text:Loss is generally considered a tax relief and can be carried forward to the following trading year and offset against the
profit for that year. A company operating in Country A with the following tax loss rules.
i. There is no cap on the number of years for which losses may be carried forward.
ii. There is no cap is applicable for the first five years of assessment next following the year of assessment in which the
taxpayers started a trade, business, or profession.
iii. There is no cap available where a taxpayer (whether individual or company) whose gross turnover is below
$10,000,000 per annum.
iv. The deduction allowed for prior year losses (PYL) is 50 percent of the net income for the respective year.
In 2022, ABC Limited, a company registered in Country A, had a trading profit of $3,000,000. The company started
business in 1997 and its gross revenue was $15,000,000 for the tax year. Prior year tax losses are $4,000,000. It's loss
relief for that year is.
a.
$2,000,000
b. $3,000,000
C.
$1,000,000
d. $1,500,000
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