ACCY6103 F

Notes

•ACCY6103 FINAL EXAM — TARGETED REVISION GUIDE (Using Your Slides Only) Q1 — PAYMENT OF TAXES, TAX ADMINISTRATION & PENALTIES (20 marks) •Provisional Tax / Terminal Tax Calculations + Due Dates (6 marks) Provisional Tax • Paid progressively during the year, usually in 3 instalments. • March balance date instalments: o P1: 28 August o P2: 15 January o P3: 7 May Residual Income Tax (RIT) = Income tax liability − tax credits (PAYE, RWT, ICs, overseas credits, trustee tax) Methods of calculating provisional tax: 1. Standard uplift method: o Current year provisional tax = 105% of previous year’s RIT, or 110% of the year-before RIT. 2. Estimate method: o Must be fair and reasonable. o Must revise if estimate becomes unreasonable. 3. GST ratio method: o Based on % of GST taxable supplies. o Designed for fluctuating or declining income. 4. Accounting Income Method (AIM): o For small taxpayers (<$5m turnover) using cloud software. o Based on year-to-date profit in the accounting system. Terminal Tax • Final balance after subtracting provisional tax from RIT. • Due dates listed in Schedule 3 (teacher will provide Part A extract during exam). •Safe-Harbour Provision...