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Practical Question 8- Tax On Profit for Service Company

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

Revenues from each month for 2016 as follows:

Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Revenue          –   11,710   11,090         7,750    7,720             –             –     4,900             –             –             –      4,864    48,034
VAT Output         –    1,171    1,109           775       772             –             –       490             –             –             –        486      4,803
Prepayment of Profit Tax         –       117       111             78          77             –             –          49             –             –             –          49          480

 

Expenses and Payments from each month for 2016 as follows:

Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
 Salary Expense     3,350   3,350    3,350      3,350    3,350    3,350    3,350    3,350    3,350    3,350    3,350    3,350    40,200
 Tax on Salary         125       125       125          125       125       125       125       125       125       125       125        125      1,494
Net Expense for Office Rental (Note 1)     1,200       300       300          300       300       300       300       300       300       300       300        300      4,500
 Net Expense for Car Rental (Note 2)           500                            500
 Purchase Car          15,000                    15,000
 Purchase Printer         190                              190
 Purchase Computers     3,600                          3,600

Additional Expenses as follows:

  • Fuel expenses of $2,000
  • Office supplies expense of $500
  • Other Expenses of $700
  • Registered costs at Ministry of Commerce (MOC) are assumed $450 during Oct 2015.
  • Registered costs at General Department of Taxation (GDT) are assumed $650 during 2015.
  • Registered capital of $40,000.

The notes as follows:

  1. PTT Consulting Company Co., Ltd paid withholding tax for office rental on behalf of lessor.
  2. PTT Consulting Company Co., Ltd paid withholding tax for car rental on behalf of lessor.
  3. PTT’s policy recognized preliminary and formation expenses as expenses.
  4. Withholding tax rate of 10%.
  5. Withholding tax, tax on salary, prepayment of profit tax and VAT output occurred during months are paid to tax admin the following months.

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

Required:

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.

Declare tax on profit and complete financial figures (2016) accordance with tax form requirement from page 3/16 to 13/16.

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