Reference no: EM132463374

CORPORATE TAXES FINAL EXERCISE

Question 1: Calculate the Net Income, Annual Corportate Taxes and VAT (fiscal year 2018) of a Company located in Barcelona, Spain based on the following information:

Point 1: The Company has an Tax ID as an Intracommunity Operator.

Point 2: A Capital Leasing contract signed in July 1st 2018 with BBVA Bank to finance a machinery wich its cost was 40,000 EUR. The contract will last only 3 years.

Point 3: The useful life of the asset is 10 years. Consider a VAT rate of 21% for the principal payment, and an Interest rate of 2.4% (paid monthly). Payments to be made at the end each the period

Point 4: Also consider an option purchase price of 1,000 EUR after the 3 years contract.

Point 5: Revenues of 215,000 EUR in 2018 (65% were national sales and the rest to some French customers). Assume a VAT rate of 21%

Point 6: Salaries of 15,000 EUR in 2018

Point 7: Advertising 10,000 EUR in 2018 @ 21% VAT

Point 8: Utilities of 8,000 EUR in 2018 @21% VAT

Point 9: Dividends of 2,000 EUR in 2018

Point 10: In 2018 the Initial Inventory was 80,000 EUR, purchases were 120,000 EUR (@21% VAT) and final inventory was 75,000 EUR.

Point 11: 80% of the raw material is supplied by a local Company, and 20% by company based in Portugal.

Point 12: Depreciation of other fixed assets were 9,000 EUR in 2018

Point 13: Late fees payment on last year´s taxes were 2,500 EUR

Point 14: Transportations expenses were 6,500 EUR in 2018 @21 VAT

Point 15: Renting expenses were 20,000 EUR in 2018 @21 VAT

Point 16: Trainning sessions delivered by an Business School were 1,400 EUR (VAT Exempt)

Point 17: Insurance expenses in 2018 were 3,000 EUR @21% VAT

Point 18: Travel expenses were 3,200 EUR in 2018 @21% VAT

Point 19: Interests income earned from Long Term Financial Investments were 4,100 EUR

Point 20: Christmas gifts to employees were 850 EUR in 2018 (first time the company does it). Assume general VAT rate was 10%

Price                       $40,000

AnnualNIR                % 2.40% $1,125.88

Depreciation exp         $13,000

Years                         3

Freq                         12N36

Salvage value             $1,000

Interests 2018               $379

VAT 2018 Vat %21= $1,102.58