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In October 2019 Sheldon Anthony was considering setting up a business in either Trinidad & Tobago or Jamaica. Income Statement Projection for 2020 is as follows: USD Income Sales 100,000 Interest Income 1,500 Dividend Income 5,500 Expenses Depreciation 20,000 Interest Expenses (1) 7,000 Repairs & Maintenance 1,500 Legal & professional fees (2) 8,000 Salaries 30,000 Bad debts (3) 3,000 Other Expenses (4) 20,000 Notes 1. All Interest was paid and as such there was no accrued interest at year end 2. Professional fees consist of: Audit and accountancy fees $3,600 Legal fees re collection of bad debts $2,000 Cost of setting up business in the selected location $900 Architects fee for designing a new Warehouse which was not used $1,500 3. The Bad debts represents a debt which is outstanding for 180 days. 4. Other expenses include $1,000 for expenses paid for another company owned by Sheldon and $600 for fines and penalties. The following assets were acquired in 2020: Asset Cost $ 1 Honda Motor car purchased in March 2020 38,000 Equipment 50,000 Computes 4,000 Office Building 72,000 5. Based on your research the capital allowance rates in Trinidad & Tobago are calculated on the reducing balance and the rates are as follows: - Building and improvements 10% - Motor vehicles - 30% - Equipment and Computer equipment 33.33% 6. The Capital Allowance Rate Sheet for Jamaica is attached. 7. Estimated Tax of $700 was paid to the relevant Tax Authority. 8. Assume Exchange Rates: J$ 140: 1 USD and TT$ 6 :1 USD 9. Corporation Tax Rate in Jamaica is 25%. The Corporation Tax rate in Trinidad is 25% on the first TTD 1 million of chargeable income, and 30% on chargeable income in excess of TTD 1 million. Required a. Assuming the projection represents actual amounts, calculate the Corporation Tax payable/ refundable for 2020 if the business operates in Jamaica or Trinidad. Calculation should be for only one country. b. What would be the difference in capital allowance for 2021 if the company operates in Trinidad and Tobago compared to operating in Jamaica.

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