Practical Question 7- Tax On Profit for Service Company

 

Gold Consulting Company Co., Ltd is a new service company incorporated in Cambodia in 2015. Under the tax regulations, Gold Consulting Company Co., Ltd is required to calculate and pay annual Tax on Profit.

Gold Consulting Company Co., Ltd is subject to profit tax rate of 20%.

Financial statements of Gold Consulting Company Co., Ltd are as follows.

	Gold Consulting Company Co., Ltd
	Profit and Loss Statement
	From January to December, 2015
Revenue from service			33,176
Total Expenses:
	Salaries expenses	42,438
	Fuel, gas, electricity and water expenses	168
	Rental expenses	2,606
	Repair and maintenance expenses	394
	Other taxes expense	1,170
	Management​​​​​​​  and other similar services expense	134,034
	Depreciation expense (note 1)	6,125
	Other expenses ( note 2)	42,101
			229,036
Income  before tax			(195,860)
Tax on Profit (Prepayment of 1%)			(334)
Net Income			(196,194)

 

		Gold Consulting Company Co., Ltd
		Balance Sheet
		From January to December, 2015
Assets
	Current Assets
		Cash on hand and in banks	10,095
		Value added tax credit	12,150
			22,245
	Fixed Assets
		Cost of Computer	656
		Cost of Furniture and equipment	7,400
		Cost of Other Non-Current Assets	19,737
		Accumulated Depreciation of Fixed Assets ( note 3)	(6,125)
			21,668
Total Assets				43,912
Liability
	Current Liabilities
		Taxes payable	637
	Non-current Liabilities
		Loan from related parties	229,375
Total Liability				230,012
Equity
	Capital		10,095
	Net Income/(loss)		(196,194)
Total Equity				(186,099)
Total Liability and Equity				43,912

Note:

1. Depreciation expense is complied with accounting policy
2. Other expenses are included issues as follows:

• Entertainment expenses of $623
• Fines and other penalties from tax admin of $160
• Some expenses of $2,807 are expense with accounting policy, but tax admin requires these expenses are excluded

3. Accumulated Depreciations for the following fixed assets:

• Computer of $328
• Furniture and equipment of $1,850
• Other Non-Current Assets of $3,947

Required:

 Declare tax on profit and complete financial figures accordance with tax form requirement from page 3/16 to 13/16.

 Please take the following notes:

• Because cost of services supplied (B 5.1) is difficult to classify which costs are direct expenses related with services earned from customers, so company decided to ignore B 5.1.
• You may calculate tax depreciation.