ADVANCED TAXATION
GENERAL OBJECTIVE
To equip the candidate with advanced knowledge of current taxation practices as well as the ability to solve practical taxation problems using relevant legislation
16.0 LEARNING OUTCOMES
A candidate who passes this paper should be able to: –
- Compute the tax liability of enterprises, entities and specialized business activities.
- Handle all value added tax matters
- Apply the procedure for conducting a tax investigation.
- Explain the tax dispute resolution mechanism
- Explain the tax implications for cross border business activities.
- Develop tax policies
CONTENT
16.1 Taxation of business income and specialized business activities
Partnership business
– Admission of a new partner and retiring partners during the year
– Conversion of partnerships into liability companies
– Incomplete records pertaining to partnership businesses
– Case law on taxation of partnership businesses
Limited companies
– Taxation of companies, including holding company, subsidiaries, branches and related parties
– Incomplete records pertaining to limited companies
– Minimum tax
– Shortfall tax computation
– Compensating tax
– Case law on taxation of limited companies
– Rental income, including residential rent income, Commercial rent income and Real estate investment trusts (REITS)
– Leasing entities, including hire purchase lease agreements
– Co-operative societies
– Trade associations, amateur sporting association and clubs
– Trust bodies, settlements and estates under administration
– Financial institutions: Banks, insurance companies and deposit taking saving and credit cooperative society
– Sea and air transport undertakings
– Unit trusts and collective investment schemes
– Professional, training, management, agency, and consultancy fees
– Property developers and contractors
– Taxation of extractive industries
– Capital gain tax
– Digital service tax
– Application of relevant case law
16.2 Value added tax administration
– Obligations of a taxable person and offences relating to VAT
– Value added tax computation
– Restriction of input tax claimable
– Imported services and VAT withholding agents
-VAT refunds and bad debt relief computation
– VAT Accountant certificate
– Value added tax automated assessments
– I tax significance and application in value added tax administration
– Application of relevant case law
16.3 TAX INVESTIGATIONS
– Tax fraud
– Civil and criminal tax investigation
– Events which may trigger an investigation
– Back duty and in-depth examination
– Customs and excise investigations
– Negotiation for settlement: Tax amnesty, Tax Penalties and Enforcement for outstanding taxes
– Types of tax audit and their significance
– Application of relevant case law
16.4 TAX DISPUTE RESOLUTION MECHANISM
– Tax disputes
– Stages of tax dispute resolution process
– Tax dispute resolution process cycle
– Legal framework and objectives of Alternative Dispute Resolution
-Types of tax disputes eligible for Alternative Dispute Resolution
– Benefits of Alternative Dispute Resolution
– Parties to Alternative Dispute Resolution and their roles
– Issues exempted from Alternative Dispute Resolution
– Alternative Dispute Resolution agreement terms and timelines
– Termination of alternative dispute resolution
16.5 TAXATION OF CROSS BORDER ACTIVITIES
– Distinction between trading in and trading with a country
-Double taxation agreements; theory, design and application
– Regional perspective with reference to the East African Community (EAC) and
the Common Market for Eastern and Southern Africa (COMESA)
– Most favored nation status
– Nature, characteristics and significance of One Stop Border Posts (OSBPs)
– Generalized system of preference and AGOA
– Tax havens and treaty shopping
– Tax information exchange agreements(TIEAS)
– Transfer pricing: oecd guidelines
– Application of relevant case law
16.6 Tax planning
– Tax planning for individuals: by way of Tax exempt activities, transactions that are allowable expenses and transactions attracting tax setoffs
– Tax planning for body corporates
– Identifying opportunities to alleviate, mitigate or defer the impact of direct or
indirect taxation
– Evaluating remuneration packages
– Tax avoidance and anti-tax avoidance provisions in the tax Act.
– Uses of tax incentives
– Disposal of business operations and restructuring of activities
– Special Economic Zones (SEZ)
– Tax risks
16.7 Tax systems and policies
– Types of tax systems
– Role of taxation in economic development
– Design of a tax policy
– Criteria for evaluation of a tax system
– Tax reforms and modernization of tax systems under various Acts
– KRA structure – LTO, MTO
16.8 Professional practice in taxation
– Forms of tax practice and matters relating thereto
– Matters relating to new clients
– Handling of client work
– Disclosures in tax returns, computations and correspondence with the Revenue
Authority
– Moral and ethical issues in taxation
– Tax agents, appointment, obligations, professional liability
– Cancellation of tax agents license
– Role of tax agents in appeals procedure
– Tax health check,
Reference Materials
- East African Community Customs Management Act, 2004 (Revised Edition 2017)
- Excise Duty Act No. 23 Of 2015 Revised Edition 2017 [2015]
- Income Tax Act Revised Edition 2018
- The Public Finance Management Act, 2012
- Tax Procedures Act of 2015,Revised Edition 2018
- Value Added Tax Act of 2013 Revised Edition 2018
