CR is resident in Country X. CR makes a taxable profit of R750,000 and pays an equity dividend of R350,000. CR pays tax on profits at a rate of 25%. Equity shareholders pay tax on heir dividend income at a rate of 30%. If CR and its equity shareholders pay a total of R205,000 tax between them, what method of corporate income tax is being used in Country X?

Select one:

a. The partial imputation system

b. The split rate system

c. The imputation system

d. The classical system

Which of the following could be said to be a progressive tax?

Select one:

a. Property sales tax of 1% of the selling price of all properties sold

b. Corporate wealth tax at 2% of total net assets up to R10 million then at 0.5% on net assets greater than R10 million

c. Personal income tax of 10% on earnings up to R10,000, then at 15% from R10,001 up to R100,000 and 25% over R100,000

d. Value added tax at a rate of 0%, 10% or 15% depending on the type of goods or services provided

Accounting depreciation is usually disallowed when calculating tax due by an entity and a deduction for tax depreciation is given instead. Which of the following statements explains the reason why accounting depreciation is replaced with tax depreciation in a tax computation?

Select one:

a. To ensure that the tax authority raises as much tax as possible

b. Tax depreciation gives the tax payer less relief than accounting depreciation

c. Tax depreciation gives the tax payer more relief than accounting depreciation

d. To ensure that all entities are allowed the same rates of depreciation for tax purposes