2. ABC SAOG Company’s Income Statement has shown RO 128000 profit for the year 2019. Since the accountant of the company is new to Oman and not aware about all the rules of Law of Income Tax on Omani Companies. Indeed, he is not sure about the following transactions he has recorded in the company account books. 1. Company purchased patent worth RO 14000 in the year 2019. The life of patent is 14 years. The accountant expensed the cost of patent 2. The company accountant charged depreciation on the following assets cost at the rate 8% and 30% respectively: 3. (i) Building cost RO40000 (ii) Equipment cost RO20000 4. The rate of depreciation on such assets as per taxation law of Oman recommended 4% and 33.33% respectively. 5. The opening inventory is undervalued by RO1500 and closing inventory is overvalued by RO1200 6. Bad debts of RO1500 recovered in the current year which was written off in concerned previous year profit. This amount is not included in the profit given above. 7. The company had incurred an amount of RO23000 on inaugurating their business outlet. This amount is deducted in calculating the profit. However, the Secretariat General of income tax department declared RO4000 inappropriate because of non-availability of documentary evidence. 8. The company earned capital gain of RO2300 on disposal of securities listed in MSM. Such gain is included in the profit. 9. The Company paid commission RO250 on securing the gain on securities. This commission charged from the profit of the company. 10. The company sustained the loss of RO1500 in the year 2010. This loss accountant carried forward and set-off from this year profit. Requirement: Calculate the taxable profit and the tax liability to be paid by the company
2. ABC SAOG Company’s Income Statement has shown RO 128000 profit for the year 2019. Since the
accountant of the company is new to Oman and not aware about all the rules of Law of Income Tax
on Omani Companies. Indeed, he is not sure about the following transactions he has recorded in the
company account books.
1. Company purchased patent worth RO 14000 in the year 2019. The life of patent is 14 years. The
accountant expensed the cost of patent
2. The company accountant charged
respectively:
3. (i) Building cost RO40000 (ii) Equipment cost RO20000
4. The rate of depreciation on such assets as per
respectively.
5. The opening inventory is undervalued by RO1500 and closing inventory is overvalued by RO1200
6.
year profit. This amount is not included in the profit given above.
7. The company had incurred an amount of RO23000 on inaugurating their business outlet. This
amount is deducted in calculating the profit. However, the Secretariat General of income tax
department declared RO4000 inappropriate because of non-availability of documentary evidence.
8. The company earned
included in the profit.
9. The Company paid commission RO250 on securing the gain on securities. This commission charged
from the profit of the company.
10. The company sustained the loss of RO1500 in the year 2010. This loss accountant carried forward
and set-off from this year profit.
Requirement: Calculate the taxable profit and the tax liability to be paid by the company
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