Tutorial Letter 101/3/2018 - THE TAXATION OF BUSINESS ACTIVITIES TAX3701 - GimmeNotes
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TAX3701/101/3/2018
Tutorial Letter 101/3/2018
THE TAXATION OF BUSINESS ACTIVITIES
TAX3701
Semesters 1 and 2
Department of Taxation
This tutorial letter contains important information regarding this module.
Bar code2 TAX3701/101
CONTENTS
Page
1 INTRODUCTION AND WELCOME ............................................................................................. 3
2 PURPOSE OF AND OUTCOMES FOR THE MODULE .............................................................. 3
2.1 Purpose.............................................................................................................................. 3
2.2 Specific outcomes and assessment criteria ........................................................................ 4
3 LECTURERS AND CONTACT DETAILS .................................................................................. 5
3.1 Administrative queries ....................................................................................................... 5
3.2 Module content-related queries ......................................................................................... 6
3.3 Deparmental academic and administrative queries ........................................................... 6
4 MODULE-RELATED RESOURCES .......................................................................................... 6
4.1 Study material ................................................................................................................... 6
4.2 Prescribed textbook........................................................................................................... 7
4.3 E-reserves/recommended books and reading lists ............................................................ 7
4.4 Pocket calculators ............................................................................................................. 7
5 STUDENT SUPPORT SERVICES FOR THE MODULE ............................................................. 8
5.1 myUnisa ............................................................................................................................ 8
5.2 Video clip .......................................................................................................................... 8
5.3 Tutors ................................................................................................................................ 8
5.4 Free computer and internet access 9
6 MODULE-SPECIFIC STUDY PLAN........................................................................................... 9
7 ASSESSMENT .......................................................................................................................... 10
7.1 Assignments...................................................................................................................... 10
7.2 Examination ...................................................................................................................... 12
7.3 Supplementary, aegrotat or special examinations ............................................................. 12
8 OTHER ASSESSMENT METHODS........................................................................................... 12
9 OTHER MATTERS .................................................................................................................... 12
9.1 Plagiarism ......................................................................................................................... 12
9.2 How do I redirect my myLife Unisa e-mail address to another account? 13
9.3 Health conditions such as HIV/AIDS 14
10 FREQUENTLY ASKED QUESTIONS ........................................................................................ 14
ASSIGNMENTS FOR FIRST SEMESTER STUDENTS ...................................................................... 15
ASSIGNMENTS FOR SECOND SEMESTER STUDENTS ................................................................. 293 TAX3701/101 1 INTRODUCTION AND WELCOME Dear Student We have pleasure in welcoming you as a student to the module THE TAXATION OF BUSINESS ACTIVI- TIES. We hope that you will find your studies interesting and rewarding and that you will be successful in the examination. Please read this tutorial letter very carefully to orientate yourself with the requirements specific to this module. This module is practical and therefore you will have to learn rules and how to apply them. This means that you will have to start with your studies immediately – the semester is 15 weeks long and you will need to give yourself time to practice what you learn. For your convenience, we include a proposed study pro- gramme that indicates the MINIMUM time that you will have to put aside for each learning unit as well as the specific outcomes and assessment standards for the module. The specific outcomes and assessment standards will be repeated in the appropriate learning units in your study guide. There are a number of lecturers in the undergraduate section of the Department of Taxation who will assist you; however, your primary lecturers are Ms Carien Cass and Ms Illana Kretzschmar. How to get started on myUnisa It is important that you use myUnisa regularly. These technological resources make it easier to communi- cate with the University, your lecturers and fellow students about your studies. Through myUnisa you can submit your assignments electronically, access the library resources, get your assignment marks and take part in activities, tasks and discussions relating to the contents of this module. Register TODAY and visit regularly. In addition to registering on myUnisa, it is crucial that you activate your myLife e-mail address, as all your official correspondence regarding this module will be sent to your myLife and not your private e-mail address. Please consult the Study @ Unisa brochure for more information on the activation of your myLife e-mail address as well as obtaining access to the myUnisa module website. All study material is available online. You will receive some printed material as back-up. HOWEVER, DO NOT WAIT FOR PRINTED MATERIALS BEFORE YOU START STUDYING. We would like to make use of this opportunity to wish you success in your studies and assure you that we realise you are not studying under ideal conditions. Therefore, we invite you to communicate with us on any matter concerning this module. 2 PURPOSE OF AND OUTCOMES FOR THE MODULE 2.1 PURPOSE This module aims to provide students studying towards an accounting degree with an integrated know- ledge of the relevant sections of the Income Tax Act 58 of 1962 and Value-Added Tax Act 89 of 1991 (VAT Act). On completion of this module, students should be able to determine the income tax and value-added tax (VAT) liability or refund of business entities in terms of the requirements of the relevant professional bodies.
4 TAX3701/101
2.2 SPECIFIC OUTCOMES AND ASSESSMENT CRITERIA
SPECIFIC OUTCOME 1
Students must be able to demonstrate an integrated knowledge of the framework used to calculate a
person’s taxable income and tax liability for a year of assessment.
Assessment criteria
Students are competent if evidence shows that they are able to:
discuss and apply the requirements of the gross income definition in a practical situation.
discuss and apply the requirements of the general deduction formula in a practical situation.
calculate the taxable income for different enterprise forms (different taxpayers) in accordance with
current tax legislation.
SPECIFIC OUTCOME 2
Students must be able to demonstrate a coherent and critical understanding of the income tax deductions
and allowances that business entities can claim in terms of current income tax legislation and the ability to
apply this knowledge to practice.
Assessment criteria
Students are competent if evidence shows that they are able to:
calculate the taxable income of a company by starting with the accounting net profit or loss.
calculate the normal income tax liability for different companies correctly.
calculate/discuss the expenses and deductions as contained in the Income Tax Act with reference
to relevant legislation and case law.
identify the different types of assets and calculate the allowances applicable to each by applying the
rules with reference to relevant legislation and case law.
discuss and apply the rules pertaining to depreciable assets and allowances with reference to rele-
vant legislation and case law.
calculate the recoupment or section 11(o) scrapping allowance when an asset is disposed of, as well
as the deferment available on recoupment, if applicable, correctly.
SPECIFIC OUTCOME 3
Students must be able to analyse the applicable VAT rules and apply it to transactions.
Assessment criteria
Students are competent if evidence shows that they are able to:
discuss the application of the VAT system in South Africa with reference to the VAT Act.
identify goods and services correctly as standard-rated, zero-rated or exempt supplies.
apply the different VAT rules correctly in different situations.
calculate the VAT payable by/refundable to a vendor correctly in a practical situation.
discuss the impact of VAT on business income tax calculations with reference to relevant legislation
and case law.5 TAX3701/101
SPECIFIC OUTCOME 4
Students must be able to analyse the disposal or deemed disposal of an asset and apply solutions in a
practical situation for capital gains tax purposes.
Assessment criteria
Students are competent if evidence shows that they are able to:
determine the capital gains tax payable by applying the relevant rules.
determine the capital gains and losses on the disposal of assets by using the proceeds and the base
cost of the relevant asset disposed of.
calculate the taxable capital gains for a year of assessment.
calculate the capital gains tax accurately on assets acquired before valuation date
(1 October 2001) and disposed thereafter.
identify the capital gains and losses in a practical situation that are to be disregarded.
SPECIFIC OUTCOME 5
Students must be able to demonstrate the ability to distinguish between the dividends paid and received
by companies and to determine the tax liabilities on these dividends.
Assessment criteria
Students are competent if evidence shows that they are able to:
identify and discuss the income tax implications that are unique to dividends received and paid.
discuss and apply the dividend definition rules.
interpret and apply the dividend tax rules.
calculate the tax liability by applying the dividend rules.
3 LECTURERS AND CONTACT DETAILS
3.1 ADMINISTRATIVE QUERIES
For any contact with the University concerning administrative matters, please consult Study @ Unisa.
Enquiries about administrative matters must be addressed to the relevant administration department to
which the problem applies and NOT to the lecturers.
Administrative enquiries should be directed to:
E-mail addresses SMS numbers Use to enquire about:
econ@unisa.ac.za n/a Registration and credit/exemption
study-info@unisa.ac.za 43578 Applications and registrations
assign@unisa.ac.za 43584 Assignments (not for submission purposes)
exams@unisa.ac.za 43584 Examinations
despatch@unisa.ac.za 43579 Study material
finan@unisa.ac.za 31954 Student accounts
gaudeamus@unisa.ac.za n/a Graduation ceremonies
myUnisaHelp@unisa.ac.za 43582 myUnisa
myLifeHelp@unisa.ac.za 43582 myLife e-mail6 TAX3701/101
When corresponding with the University in writing, always supply the following:
your student number
module code
a telephone number where we can contact you
3.2 MODULE CONTENT-RELATED QUERIES
Ensure that you have the right module code on hand when you contact the lecturers.
Lecturers:
The following lecturers are available to
assist you:
Ms SC Cass
012 429 8992
Mr A Swanepoel
012 429 4313
Mr MC van Dyk
012 429 4918
Ms C Stedall
012 429 4301
Ms I Kretzschmar
012 429 4394
Ms M Bernard
012 429 4002
Ms R Moosa
012 429 8976
Ms R Matenche
012 429 4752
Ms MSI Wentzel
012 429 4876
079 365 1124 (Please do not send text messages,
missed calls or “please call me” mes-
Departmental cell phone number:
sages to this number, we will not re-
spond to it.)
TAX3701-18-S1@unisa.ac.za (semester 1)
E-mail contact with lecturers: TAX3701-18-S2@unisa.ac.za (semester 2)
Course contact tab on myUnisa
CAS enquiries E-mail: CASenquiries-Undergraduate@unisa.ac.za
Contact number: 012 429 4211
3.3 DEPARTMENTAL ACADEMIC AND ADMINISTRATIVE QUERIES
Direct queries to Ms S Brecher (Departmental secretary) at 012 429 4494.
4 MODULE-RELATED RESOURCES
4.1 STUDY MATERIAL
All the following tutorial letters for this module are available on myUnisa at https://my.unisa.ac.za.
Tutorial Content Learning units to
Letter be covered
101 Contains very important information regarding the module. Keep it
at hand, as you will have to refer to it regularly.
Assignment 1 – compulsory for exam admission, multiple-choice
questions, counts towards year mark (25%). 1 to 4
101 Assignment 2 – counts towards year mark (75%). 5 to 67 TAX3701/101
Tutorial Content Learning units to
Letter be covered
102 Contains the first of two study guides for this module. 1 to 6
103 Contains the second study guide for this module. 7 to 11
201 Contains the questions and solutions to Assignment 3 (mock exam
paper).
202 Contains the solution to Assignment 1.
203 Contains the solution to Assignment 2.
Further tutorial letters
You may receive further tutorial letters during the semester as the need may arise. Tutorial letters are all
sequentially numbered.
Additional study material
The study material mentioned in this section is the only study material that the University supplies to you.
The lecturers believe that this is sufficient for you to complete your studies successfully.
Each year the Income Tax Act is amended. We expect you to update yourself on the latest tax amend-
ments, but you will not be issued with any new study material. You can visit the SARS website at
www.sars.gov.za for relevant updates/changes. Work through the study material that you have at your
disposal together with updates/changes. Remember that if you become a tax practitioner, you will need
to update your knowledge continually.
4.2 PRESCRIBED TEXTBOOK
It is essential that you obtain the following prescribed textbook and have it readily available:
A Student’s Approach to Income Tax – Business Activities. 2018.
You must obtain the prescribed book as soon as possible. Note that the library does not provide for this
textbook specifically and that copies of this book may not always be readily available in the library.
Please refer to the list of official booksellers and their addresses in Study @ Unisa.
4.3 E-RESERVES/RECOMMENDED BOOKS AND READING LISTS
There are no e-reserves/recommended books and reading lists for this module.
4.4 POCKET CALCULATORS
The following rules apply regarding the use of calculators during the examination:
Candidates may only use silent, electronic, battery-driven pocket calculators.
Calculators must be cordless, and may not have print-out facilities or alpha keys.
Any financial calculator will be allowed, as the following tables will not be provided:
Tables of present value factors for various discount rates for varying periods
Tables of future value factors for various interest rates for varying periods
The calculator function on mobile telephones or any electronic device (i.e. laptops and/or any smart
phone) may not be used.
Candidates may not share a calculator with another candidate in the examination room.8 TAX3701/101
5 STUDENT SUPPORT SERVICES FOR THE MODULE
5.1 myUNISA
To go to the myUnisa website, start at the main Unisa website (http://www.unisa.ac.za) and then click on
“Login to myUnisa” on the right-hand side of the screen. You can also go there directly by typing in
https://my.unisa.ac.za.
Please consult Study @ Unisa for more information on myUnisa.
Please activate your myLife e-mail account so that we can communicate with you.
For this module, we will use the following tools on myUnisa:
Official study material – all tutorial letters that you will need for this module
Course contact – module e-mail for technical questions
Additional resources – podcasts and vodcasts will be uploaded here
Schedule – a weekly study schedule
Announcements – when required
Discussion forum – please take part in meaningful content-related discussions
FAQ – please read this
Self-assessment – short questions at the end of learning units.
Please visit myUnisa from time to time to use these valuable resources.
5.2 VIDEO CLIP
We will be sending out a video clip via a link for this module. The video clip is a discussion of a mock
exam paper (tutorial letter 201). The video clip is a revision tool and will therefore only be available
towards the end of the semester. The video clip is not a replacement for doing the work, it is merely a
tool to assist you to revise for the exam.
5.3 TUTORS
With effect from 2013, Unisa offers online tutorials (e-tutoring) to students registered for modules at NQF
levels 5, 6 and 7 – this is qualifying first, second and third year modules.
Once you have been registered for a qualifying module, you will be allocated to a group of students with
whom you will be interacting during the tuition period as well as an e-tutor who will be your tutorial faci-
litator. Thereafter you will receive an sms informing you about your group, the name of your e-tutor and
instructions on how to log onto myUnisa to receive further information on the e-tutoring process.
Online tutorials are conducted by qualified e-tutors who are appointed by Unisa and are offered free of
charge to students. All you need to participate in e-tutoring is a computer with internet connection. If you
live close to a Unisa regional centre or a tele-centre contracted with Unisa, visit any of these to access the
internet. E-tutoring takes place on myUnisa where you are expected to connect with other students in
your allocated group. The e-tutor’s role is to guide you through your study material during this interaction
process. For you to get the most out of online tutoring, you need to participate in the online discussions
that the e-tutor will be facilitating.
There are modules that students have been found to repeatedly fail; these modules are allocated face-to-
face tutors, and the tutorials for these modules take place at the Unisa regional centres. These tutorials
are also offered free of charge; however, it is important for you to register at your nearest Unisa regional
centre to secure attendance of these classes.9 TAX3701/101
5.4 FREE COMPUTER AND INTERNET ACCESS
Unisa has entered into partnerships with establishments (referred to as telecentres) in various locations
across South Africa to give you (as a Unisa student) free access to computers and the internet. This
access enables you to conduct the following academic-related activities: registration; online submission of
assignments; engaging in e-tutoring activities; and signature courses. Please note that any other activity
outside of these is for your own costing, for example, printing and photocopying. For more information on
the telecentre nearest to you, please visit www.unisa.ac.za/telecentres.
6 MODULE-SPECIFIC STUDY PLAN
Here is a proposed weekly plan for TAX3701 based on a minimum of nine hours per week spent on the
module. Please keep in mind that you have 15 weeks of study from registration to start of exams.
Semester 1 commences 22 January 2018 and semester 2 commences 9 July 2018. If you start later, you
will have to catch up the time that you have missed.
Study Minimum
Week S1 S2 Topic time
needed
1 22/1 9/7 Read Tutorial Letter 101 2 hours
Introduction to Tutorial Letter 102 1 hour
Learning unit 1: Value-Added Tax 6 hours
2 29/1 16/7 Learning unit 1: Value-Added Tax 6 hours
Learning unit 2: Turnover tax 3 hours
3 5/2 23/7 Learning unit 3: Income of a business
entity 4 hours
Learning unit 4: General deduction
formula Tutorial 3 hours
Assignment 1 (Tutorial Letter 101) Letter 3 hours
4 12/2 30/7 Learning unit 5: Special deductions 102/3 9 hours
5 19/2 6/8 Learning unit 5: Special deductions 9 hours
6 26/2 13/8 Learning unit 6: Capital allowances
9 hours
and recoupment
7 5/3 20/8 Learning unit 6: Capital allowances
9 hours
and recoupment
8 12/3 27/8 Learning unit 6: Capital allowances
and recoupment 6 hours
Assignment 2 (Tutorial Letter 101) 3 hours10 TAX3701/101
Study Minimum
Week S1 S2 Topic time
needed
9 19/3 3/9 Learning unit 7: CGT 9 hours
10 26/3 10/9 Learning unit 7: CGT 9 hours
11 2/4 17/9 Learning unit 7: CGT 9 hours
12 9/4 24/9 Learning unit 8: Taxation of companies
9 hours
and close corporations Tutorial
13 16/4 1/10 Learning unit 9: Employees tax and Letter
103/3 9 hours
provisional tax
14 23/4 8/10 Learning unit 10: Trusts
9 hours
Learning unit 11: Partnerships
15 30/4 15/10 Revision 6 hours
Assignment 3 (Tutorial Letter 201) 3 hours
7 ASSESSMENT
Assignment 1 Assignment 2 Assignment 3 Exam
Compulsory for Self-assessment
exam admission, 75% of year Does not count towards Sub-minimum of
counts 25% of year mark your year mark 40% to take year
mark. Multiple-choice (Tutorial Letter 201) mark into account
20% OF FINAL MARK 80% OF FINAL MARK
7.1 ASSIGNMENTS
There are three assignments per semester.
As a UNISA student, you do not write tests and therefore you need to use the assignments as a substitute.
It is part of your learning process to receive feedback in the form of an assignment solution. The comple-
tion of your assignment will help you, as you will only obtain a total understanding of this module through
practice by working through questions.
You MUST keep a copy of your completed assignments, so that if assignments are lost before they
can be assessed, you will have a copy that we can mark.
Submission of assignments
Assignments, both written and mark-reading sheets, can be submitted by post or electronically via
myUnisa. See Study @ Unisa for the different ways in which assignments can be submitted. Assign-
ments may not be faxed or e-mailed. We advise you, if possible, to submit your assignment electro-
nically.
A mark-reading sheet is required for answering Assignment 1. Before completing the mark-reading sheet,
please see the instructions contained in the Study @ Unisa, read them carefully and follow them exactly
to avoid mistakes and delays.
PLEASE NOTE: Written assignments that are submitted electronically/online for this module must
be in PDF format.11 TAX3701/101
For detailed information on assignments, please refer to Study @ Unisa.
PLEASE NOTE: Information about assignments, (whether the University has received your assign-
ment or the date on which an assignment was returned to you) can be obtained on myUnisa.
Marking of assignments
Assignment 1 will be marked electronically.
Assignment 2 will be marked by lecturers.
Assignment 3 is a self-assessment assignment, which means that you do not submit to Unisa and you
mark it yourself. It is a mock exam paper that you can find in Tutorial Letter 201 (both the questions and
the solutions).
You will receive the correct answers automatically for multiple-choice questions. The solutions to all
assignments will only be available on myUnisa for all students registered for this module. Tutorial
letters are numbered 201, 202 and so forth. Feedback regarding assignments will be announced on
myUnisa. The assignments and the feedback on these assignments constitute an important part of your
learning and should help you to be better prepared for the next assignment and the examination.
The feedback on the self-assessment assignments is included in Tutorial Letter 201. This will enable you
to mark your assignment as soon as you have completed it.
Due dates
The due dates for the assignments are as follows:
FIRST SEMESTER
ASSIGNMENT DUE DATE UNIQUE NUMBER
1 (compulsory) 9 March 2018 726434
2 6 April 2018 791059
SECOND SEMESTER
ASSIGNMENT DUE DATE UNIQUE NUMBER
1 (compulsory) 10 August 2018 843499
2 14 September 2018 645132
Finality of due dates
Please remember that Assignment 1 is marked by the computer and these marks are finalised on a given
date, therefore NO extensions can be granted, WHATSOEVER.
Respectively, Assignments 1 and 2 count 25% and 75% of your year mark. Only Assignment 1 is compul-
sory, this means that you have to submit Assignment 1 for admission to the exam.
The assignments do not cover ALL the essential work of the module – they are just a tool to assist you to
study the material in good time. Furthermore, just doing assignments is not sufficient preparation for the
examination. For your own good, and in preparation for the examination, we recommend that over and
above the assignments, you should do all the activities properly.
No extension of time will be given for the submission of assignments, since solutions will be
available on myUnisa automatically to all students after the due dates. No correspondence or
telephone conversation will be conducted regarding the late submission of assignments.
Assignments received after due date will not be marked.12 TAX3701/101
7.2 EXAMINATION
The examination counts 100 marks and is a written exam of three hours. The entire syllabus is covered
in the examination and you can therefore not afford to leave out any part of it.
The mark obtained for this examination will contribute 80% towards the final mark for this module. To
obtain admission to the examination, you must submit Assignment 1 (the compulsory assignment) on
or before the due date. Assignment 2 is not compulsory but it will count towards your year mark.
Once again, all-important information regarding the administration of the exam is contained in Study @
Unisa.
Final mark
The final mark for this module is calculated as follows (this is an example):
Final mark
Assignment Weighting Mark achieved (weight x actual mark)
1 25% x 20% 80% 4%
2 75% x 20% 68% 10,20%
3 0% 75% 0%
Examination 80% 64% 51,20%
Final mark 65%
You must obtain a final mark of 50% or more to pass this module.
Your year mark will be taken into account when calculating your final mark.
7.3 SUPPLEMENTARY, AEGROTAT OR SPECIAL EXAMINATIONS
Supplementary, aegrotat and special examinations are allowed in this module.
You will not be required to submit assignments if you are a supplementary, aegrotat or special examination
student.
Supplementary, aegrotat or special examination student – your year mark from the previous semester will
be carried forward. As a supplementary student, you will still have access to myUnisa and we encourage
you to use all the resources.
8 OTHER ASSESSMENT METHODS
There are no other assessment methods for this module.
9 OTHER MATTERS
9.1 PLAGIARISM
Plagiarism is the act of taking words, ideas and thoughts of others and passing them off as your own. It
is a form of theft, which involves a number of dishonest academic activities.
The Disciplinary Code for Students (2004) is given to students at registration. Students are advised to
study the Code, especially sections 2.1.13 and 2.1.14 (2004:3 – 4). Kindly read the University’s Policy on
Copyright Infringement and Plagiarism as well.13 TAX3701/101
Plagiarism declaration:
By submitting “YOUR MODULE NAME”, assignment number THE RELEVANT ASSIGNMENT
NUMBER, I declare that:
I have read the Unisa Students’ Disciplinary Code;
I know what plagiarism is, that plagiarism is wrong and that disciplinary steps can be taken
against me if I am found guilty of plagiarism;
This assignment, submitted by myself, is my own work and that I have referenced all the sources
that I have used;
I have not allowed any other student to copy my work;
I know that if I am found to be in violation of this declaration, I will receive 0% for the assignment
involved.
Please note: You do not have to submit the declaration. By submitting any assignment for “YOUR
MODULE NAME”, you automatically declare that you adhere to all the above with
regard to the specific assignment.
9.2 HOW DO I REDIRECT MY MYLIFE UNISA E-MAIL ADDRESS TO ANOTHER ACCOUNT?
Redirected messages appear as though they came from the original sender. Use a redirect message rule
when you want replies to redirected messages to go to the original sender.
Sign into the Outlook web app by doing the following:
1. Sign in on myUnisa.
2. Select the More Sites tab.
3. Under Projects, select myLife e-mail access
4. You are now in Outlook.
5. At the top of the page, select Settings > Options, and then select one of the following:
6. Organize email > Inbox rules > New
7. OR
8. Mail > Automatic processing > Inbox rules > New > Create a new rule for arriving messages
9. Type a name for your rule.
10. Under When the message arrives, select Apply to all messages.
11. Under Do the following, select Forward, redirect, or send > Redirect the message to.
12. Enter the email address you want in the To box, or choose it from your list of contacts.
13. Choose OK to save your selections, and OK or Save to create the rule.
A copy of messages that you redirect or forward remains in your mailbox. If you add an action to delete
the message, the message goes to your Deleted Items folder and is still counted against your mailbox
limit. If you exceed your mailbox limit, you may be blocked from sending or receiving new messages.
Forwarding rules also may not work until you delete enough messages to bring the total below your mailbox
limit.
When you create a forward or redirect rule, you can add more than one address to send to. The number
of addresses you can send to may be limited depending on your account settings. If you create a rule with
more than one address, test it to make sure it works.14 TAX3701/101
If you do not want a forward or redirect inbox rule to apply to all messages, choose any option other than
Apply to all messages.
Your administrator may have blocked the ability to use forward or redirect rules to send mail to some or all
domains outside of your own. After creating a redirect or forward rule, test the rule by sending a message
from a third account to your account. Then check the account to which your rule is set redirect or forward
messages.
9.3 HEALTH CONDITIONS SUCH AS HIV/AIDS
If you are a student with a health-related condition such as HIV/AIDS, or have a close family member with
this or another health condition, then you need to take cognisance thereof in planning your studies. It will
be unwise to cram tasks as this creates enormous stress, which negatively impacts on your performance
as a student, as well as your health. Planning your studies is essential so that you work consistently and
make progress.
It is wise to know your health status (HIV/AIDS, blood pressure, diabetes, cholesterol, etcetera). If you
are informed by medical tests, with the necessary medical and supportive interventions, you can prolong
and improve the quality of your life and succeed in your studies. Go to Unisa Student Health and Wellness
for more information.
10 FREQUENTLY ASKED QUESTIONS
1. Must I buy the prescribed textbook or can I use a previous version?
The Income Tax Act is amended (changed) each year with the budget speech. This means that old text-
books will be out of date. Please only use the current version of the textbook.
2. I think that I found a mistake in the study material, what should I do?
Despite the care taken to ensure that the tutorial letters, assignments and solutions are comprehensible
and free from errors, omissions and discrepancies may occur, as our study material must be updated
annually. Should you come across such matters, or matters that are not clearly expressed, kindly let us
know to enable us to make the necessary correction. As soon as we discover a mistake we will make an
announcement on the myUnisa system. (Please register yourself to receive e-mails from the system.)
3. Please could I have the answers to the old exam papers that are available on myUnisa.
These are uploaded automatically on myUnisa. We advise you, however, not to focus on old examination
papers only as the content of modules and therefore examination papers changes from year to year. You
may, however, accept that the type of questions that will be asked in the examination will be similar to
those asked in the activities in your study guide and in the assignments. Remember that the solutions to
the previous exam papers are not made available to students, as they are out of date. Assignment 3 is a
previous exam paper that has been updated with the legislative amendments and a new solution is
provided for you in Tutorial Letter 201. Other exam questions have in most instances been incorporated
into your study guide as additional questions to work through.
You can also refer to the Study @ Unisa, which contains an A-Z guide of the most relevant study infor-
mation.
4. I received my study material too late to submit my first assignment on time. What do I do
now?
You will have to prove that you indeed received your study material late and submit it with a motivated
request to examadmission@unisa.ac.za.15 TAX3701/101
ASSIGNMENTS FOR FIRST SEMESTER STUDENTS
SUBMISSION OF ASSIGNMENT 1 IS COMPULSORY TO OBTAIN ADMIS-
SION TO THE EXAMINATION. ADMISSION WILL BE OBTAINED BY SUBMIT-
TING THE ASSIGNMENT AND NOT BY THE MARKS YOU OBTAINED FOR
IT. THIS ASSIGNMENT WILL COUNT A MAXIMUM OF 5% OF YOUR FINAL
MARKS.
PLEASE ENSURE THAT THIS ASSIGNMENT REACHES THE UNIVERSITY
ON OR BEFORE THE DUE DATE SINCE LATE SUBMISSION WILL RESULT
IN YOU NOT BEING ADMITTED TO THE EXAMINATION. NO CORRESPON-
DENCE OR TELEPHONIC CONVERSATION WILL BE ENTERED INTO IN
THIS REGARD.
IF YOU INTEND TO POST YOUR ASSIGNMENT, MAKE A COPY OF IT BE-
FORE YOU POST IT TO UNISA, IN CASE YOUR ASSIGNMENT IS LOST IN
THE POST.
WE ADVISE YOU, IF POSSIBLE, TO SUBMIT YOUR ASSIGNMENT ELEC-
TRONICALLY IN PDF FORMAT.
IMPORTANT INFORMATION REGARDING MULTIPLE-CHOICE QUESTIONS:
(1) You must answer all questions on a mark-reading sheet or submit them electronically via the
myUnisa online system.
(2) Before completing the mark-reading sheet, study the instructions in Study @ Unisa. Read these
instructions carefully and follow them exactly to avoid mistakes.
(3) Do your calculations on a separate piece of paper before completing the mark-reading sheet.
(4) There is only one correct answer to each question.
(5) All questions are equal in value.16 TAX3701/101
FIRST SEMESTER
ASSIGNMENT 1 (30 marks, 54 minutes)
MODULE DUE DATE UNIQUE NUMBER
TAX3701 9 MARCH 2018 726434
ASSESSMENT CRITERIA FOR THIS ASSIGNMENT
For this assignment, you will need to have achieved the learning objectives set out in learning units 1 to
4 as contained in Tutorial Letter 102/3/2018. This assignment will assess your ability to select the alter-
native that best reflects the quantitative/qualitative solution to a problem. This assignment will count a
maximum of 5% towards your final mark.
REQUIRED: MARKS
Select the option ((1) – (4)) that represents the correct answer to the question.
(The mark-reading sheet has five options; please ignore option 5 for each question in 30
this assignment.)
ASSIGNMENT 1: SEMESTER 1
Transporters (Pty) Ltd derives its income from transporting both goods (by truck) and fare-paying passen-
gers (by bus). As Transporters (Pty) Ltd makes both taxable and exempt supplies for VAT purposes, the
South African Revenue Service accepted a 65% ratio for VAT apportionment purposes. Transporters (Pty)
Ltd is a registered VAT vendor on the invoice basis.
Transporters (Pty) Ltd’s income and expenditure for the two-month tax period ending 31 August 2017 is
shown below. All amounts are inclusive of VAT, where applicable, unless otherwise stated.
Income Notes R
Transporting of goods 650 000
Transporting of passengers 233 000
Indemnity payment 1 395 000
Expenditure
Finance expenses 2 23 500
Bad debts 3 66 440
Fuel for all vehicles 52 700
Purchase of second-hand truck 1 450 000
Repairs and maintenance 4 45 500
Rental of computers 5 33 330
Water and electricity 5 15 990
Insurance premiums on trucks and buses 7 880
Advertising cost 6 1 540
Employee costs 7 125 00017 TAX3701/101
ASSIGNMENT 1: SEMESTER 1 (continued)
Notes:
1. On 16 July 2017, an insurance settlement was awarded for a truck damaged beyond repair by protes-
tors. On receipt of the indemnity award from the insurance company in August 2017, Transporters
(Pty) Ltd purchased a second-hand truck for R450 000 from a non-vendor.
2. Finance expenses relates to both the transporting of goods and passengers and comprise of the
following amounts (all amounts are exclusive of VAT):
R
Interest charge 20 820
Bank charges 2 680
3. The bad debts of R66 440 written off in the period, relate to the following debtors:
R
Transporting of goods 43 670
Transporting of passengers 22 770
4. Repairs and maintenance costs amounted to the following (all amounts are exclusive of VAT):
R
Repairs relating to the trucks 22 750
Maintenance relating to the buses 22 750
5. The following costs were incurred in relation to the transporting of both goods and passengers: rental
of the computers and the water and electricity cost.
6. The advertising cost was for an advertising campaign relating to the fare-paying passengers by bus.
7. Employee costs relate to both the transporting of goods and passengers and comprise of the follow-
ing amounts (exclusive of VAT):
R
Salaries and wages 120 000
Meals provided to staff in the staff canteen 5 000
Club membership fees 4 500
Repayment of an employees’ personal debt 3 500
Answer questions 1 to 15 of Assignment 1, based on the information provided for Transporters (Pty) Ltd’s
two-month tax period ended on 31 August 2017. Round off all your calculations to the nearest rand.18 TAX3701/101
ASSIGNMENT 1: SEMESTER 1 (continued)
QUESTION 1
Calculate the output VAT on the income from transporting goods. Which one of the following is correct?
(1) R51 886
(2) R79 825
(3) R91 000
(4) Rnil
QUESTION 2
Calculate the output VAT on the income from transporting passengers. Which one of the following is
correct?
(1) R28 614
(2) R32 620
(3) Rnil – exempt supply
(4) Rnil – zero-rated supply
QUESTION 3
Calculate the total output tax applicable to the indemnity payment. Which one of the following is correct?
(1) Rnil
(2) R31 531
(3) R48 509
(4) R55 300
QUESTION 4
Which one of the following statements is correct?
(1) Input VAT is claimable on total finance expenses.
(2) Input VAT is claimable only on the interest charge, the bank charges are an exempt supply.
(3) No input VAT is claimable, finance expenses are exempt supplies.
(4) Input VAT is claimable only on the bank charges; the interest charge is an exempt supply.
QUESTION 5
Calculate the total input tax claimable on the bad debts written off. Which one of the following is correct?
(1) R2 796
(2) R5 304
(3) R5 363
(4) R8 15919 TAX3701/101
ASSIGNMENT 1: SEMESTER 1 (continued)
QUESTION 6
Calculate the input VAT claimable on the fuel for all the vehicles. Which one of the following is correct?
(1) Rnil – zero-rated supply
(2) Rnil – exempt supply
(3) R4 207
(4) R6 472
QUESTION 7
Calculate the input VAT claimable on the purchase of the second-hand truck. Which one of the following
is correct?
(1) Rnil – purchased from a non-vendor
(2) R35 921
(3) R55 263
(4) R63 000
QUESTION 8
Calculate the input VAT claimable on the repair cost to the trucks. Which one of the following is correct?
(1) Rnil – exempt supplies
(2) R2 070
(3) R2 794
(4) R3 185
QUESTION 9
Calculate the input VAT claimable on the maintenance cost for the buses. Which one of the following is
correct?
(1) Rnil – exempt supplies
(2) R2 070
(3) R2 794
(4) R3 185
QUESTION 10
Calculate the input VAT claimable on the rental of computers. Which one of the following is correct?
(1) R2 661
(2) R3 033
(3) R4 093
(4) R4 66620 TAX3701/101
ASSIGNMENT 1: SEMESTER 1 (continued)
QUESTION 11
Calculate the input VAT claimable on water and electricity. Which one of the following is correct?
(1) Rnil – zero-rated supply
(2) R1 276
(3) R1 964
(4) R2 239
QUESTION 12
Calculate the input VAT claimable on the insurance premiums paid. Which one of the following is correct?
(1) R629
(2) R717
(3) R968
(4) R1 103
QUESTION 13
Calculate the input VAT claimable on the advertising cost paid. Which one of the following is correct?
(1) R216
(2) R189
(3) Rnil – zero-rated supply
(4) Rnil – exempt supply
QUESTION 14
Which one of the following statements is incorrect?
(1) Input vat cannot be claimed on salaries and wages, as it is not a supply.
(2) Input vat is denied on meals provided to staff, as it is entertainment.
(3) Input vat on club membership fees is denied.
(4) Payment of an employee’s personal debt, a deemed output vat needs to be calculated on the
fringe benefit.
QUESTION 15
On which date should Transporters (Pty) Ltd pay the VAT due to SARS for the two-month VAT period
ending 31 August 2017 if the return and the payment is submitted via e-filing?
(1) 25 September 2017
(2) 30 September 2017
(3) 25 August 2017
(4) 31 August 201721 TAX3701/101
ASSIGNMENT 1: SEMESTER 1 (continued)
QUESTION 16
In terms of paragraphs 3 and 4 of the Sixth Schedule to the Income Tax Act, certain persons are specifically
excluded and disqualified as microbusinesses. Which one of the following definitions is not correct in
determining whether a person is excluded and disqualified as a microbusiness?
(1) A person who, at any time during the year of assessment, holds shares or interests in a private
company, close corporation or co-operative.
(2) A person of whom more than 20% of his or her total receipts consists of both investment and
professional income.
(3) A person who is a personal service provider or a labour broker.
(4) A person who receives capital receipts in excess of R1,5 million over four years.
QUESTION 17
Taxable turnover of a microbusiness excludes certain items. Which one of the following statements is
incorrect?
(1) 100% of investment income of companies, close corporations and co-operatives.
(2) Government grants and amounts received from small business funding entities that are exempt
from income tax in terms of the Income Tax Act.
(3) Any amount on which normal tax had already been paid.
(4) Any amount received by way of a refund.
SnackPack CC is a registered micro business. For the 2018 year of assessment, SnackPack CC had the
following receipts:
Cash receipts of R650 000
Capital receipt of R132 000 from the disposal of business assets (a capital gain of R40 000 was
made)
Interest of R12 500 on a fixed deposit with Indigo Bank
Refund of R8 600 received from a supplier of goods that were damaged when delivered to Snack
Pack CC
Answer questions 18 to 19 of Assignment 1 based on the information provided for SnackPack CC. Round
off all your calculations to the nearest rand.
QUESTION 18
Calculate the taxable turnover for SnackPack CC for its 2018 year of assessment. Which one of the
following is correct?
(1) R682 500
(2) R728 500
(3) R782 000
(4) R803 10022 TAX3701/101
ASSIGNMENT 1: SEMESTER 1 (continued)
QUESTION 19
Calculate the turnover tax for SnackPack CC for its 2018 year of assessment, assuming that the taxable
turnover is R850 000. Which one of the following is correct?
(1) R 3 000
(2) R 8 650
(3) R 9 650
(4) R32 150
QUESTION 20
Woodpeckers CC is a registered micro-business. Woodpeckers CC received a foreign dividend of R19 000
and R105 000 as a capital receipt from the disposal of a vacant stand during the 2018 year of assessment
(the land was purchased for R50 000 in 2012). Which one of the following will be included in Wood-
peckers CC’s taxable turnover for the 2018 year of assessment?
(1) R27 500
(2) R46 500
(3) R52 500
(4) R71 500
QUESTION 21
Which one of the following options does NOT form part of the general deduction formula as outlined in
section 11(a) of the Income Tax Act?
(1) Carrying on a trade
(2) Total amount in cash or otherwise
(3) Actually incurred
(4) In the production of income
QUESTION 22
In determining if an item may be of a capital nature for the general deduction formula, which one of the
following options were NOT established by the courts?
(1) The true nature of the transaction.
(2) The creation of an asset or advantage providing an enduring benefit.
(3) The type of business.
(4) The closeness of the connection to the income-earning operations or income-earning struc-
ture.23 TAX3701/101
ASSIGNMENT 1: SEMESTER 1 (continued)
QUESTION 23
Tea Traders (Pty) Ltd incurred a loss of trading stock to the amount of R43 600 due to a fire during its
2018 year of assessment. Tea Traders (Pty) Ltd was insured in terms of a short-term insurance contract
and received R34 800 from its insurance company to cover the loss of trading stock. Calculate the amount
claimable in terms of the general deduction formula for the 2018 year of assessment. Which one of the
following is correct?
(1) R43 600
(2) R34 800
(3) R 8 800
(4) Rnil
QUESTION 24
Tea Traders (Pty) Ltd owes Logistics One (Pty) Ltd an amount of R15 900 for transporting stock to one of
their foreign branches. A tax invoice was issued on 1 December 2017, but by 28 February 2018 (the end
of Tea Traders (Pty) Ltd’s year of assessment), only R9 500 was paid. Both Tea Traders (Pty) Ltd and
Logistics One (Pty) Ltd are registered vendors for VAT purposes. Calculate the amount that may be
claimed as a deduction in terms of the general deduction formula. Which one of the following is correct?
(1) Rnil
(2) R6 400
(3) R9 500
(4) R15 900
QUESTION 25
Which one of the following deductions is NOT prohibited in terms of section 23?
(1) Fines, bribes, unlawful kickbacks or penalties due to unlawful activities
(2) The value for any insurance policy ceded to an employee director, their family or a retirement
fund of which they are members
(3) A proportion of private expenses that were utilised for business purposes
(4) Expenses incurred in respect of exempt income
QUESTION 26
Which one of the following options was the most important principle laid down by the courts in COT v
Levy?
(1) The intention at the time of acquisition is important, and circumstances in particular may be
fundamental and decisive.
(2) If an owner subdivides his or her land, the planning, extent, duration, nature, degree, organi-
sation and marketing strategies relating to the concept “scheme of profit” will determine
whether the owner is realising his or her asset to the best advantage or embarking on a busi-
ness venture.
(3) A taxpayer may even acquire an asset with mixed motives – the only course is to seek and
give effect to the dominant factor.
(4) Neither the fact that the taxpayer decides to realise an asset nor the fact that he or she does
so in such a way that he or she realises it to the best advantage is proof of a change of inten-
tion.24 TAX3701/101
ASSIGNMENT 1: SEMESTER 1 (continued)
QUESTION 27
Which one of the following options is correct?
The year of assessment for a company with a financial year-end of 30 June 2018 is …
(1) 1 July 2017 to 30 June 2018
(2) 1 July 2018 to 30 June 2019
(3) 1 June 2018 to 30 June 2018
(4) 30 June 2018 to 1 July 2019
QUESTION 28
Which one of the following options is NOT one of the objective factors considered by the courts for deter-
mining a taxpayer’s intention with regard to receipts of a capital nature?
(1) Manner of disposal
(2) Nature of the asset disposed of
(3) Nature of the taxpayer
(4) Amount of the transaction
QUESTION 29
Which one of the following statements is incorrect?
(1) If the compensation is paid to reimburse the taxpayer for trading profits lost, the compensation
will be taxable.
(2) If the compensation is paid to replace a lost capital asset, it will be of a capital nature.
(3) A prize that depends on an element of luck and is not a business operation will be of a capital
nature.
(4) For a journalist who wins a prize in a literary competition, the receipt will be of a capital nature.
QUESTION 30
In terms of the Income Tax Act, which one of the following items is NOT exempt or partially exempt from
income tax?
(1) Unemployment-insurance benefit funds
(2) Dividends from REIT or a controlled property company
(3) Bursaries and scholarships
(4) Relocation benefits
END OF ASSIGNMENT 125 TAX3701/101
FIRST SEMESTER
ASSIGNMENT 2 (40 marks, 72 minutes)
MODULE DUE DATE UNIQUE NUMBER
TAX3701 6 APRIL 2018 791059
THE MARK YOU HAVE OBTAINED FOR THIS ASSIGNMENT WILL FORM
75% OF YOUR YEAR MARK FOR THIS MODULE. YOUR YEAR MARK WILL
CONTRIBUTE 20% TOWARDS YOUR FINAL MARK.
PLEASE ENSURE THAT THIS ASSIGNMENT REACHES THE UNIVERSITY
ON OR BEFORE THE DUE DATE SINCE LATE SUBMISSION WILL RESULT
IN YOUR MARK OBTAINED FOR THIS ASSIGNMENT, WILL NOT FORM
PART OF YOUR YEAR MARK! NO CORRESPONDENCE OR TELEPHONIC
CONVERSATION WILL BE ENTERED INTO IN THIS REGARD.
IF YOU INTEND TO POST YOUR ASSIGNMENT, MAKE A COPY OF IT BE-
FORE YOU POST IT TO UNISA, IN CASE YOUR ASSIGNMENT IS LOST IN
THE POST.
WE ADVISE YOU, IF POSSIBLE, TO SUBMIT YOUR ASSIGNMENT ELEC-
TRONICALLY IN PDF FORMAT.
ASSESSMENT CRITERIA FOR THIS ASSIGNMENT
For this assignment, you will need to have achieved the learning objectives set out in learning units 5 to
6 as contained in Tutorial Letter 102/3/2018.26 TAX3701/101
ASSIGNMENT 2: FIRST SEMESTER
QUESTION 1 (40 marks, 72 minutes)
Mega Group (Pty) Ltd manufactures stationery products and delivers to retail shops across South Africa.
The company is a registered vendor for VAT purposes and its year of assessment ends on 28 February 2018.
All amounts exclude VAT, unless otherwise stated. The company is not a small business corporation
as defined.
The calculated taxable income for the 2018 year of assessment is R3 123 321 before the tax implications
of the items listed in 1 to 10 below have been taken into account.
1. Inventory
01/03/2017 28/02/2018
Cost price Market value Cost price Market value
Inventory R430 800 R440 760 R240 340 R230 900
2. Learnership agreements
Mega Group (Pty) Ltd entered into the following learnership agreements:
Successful
Employee Date entered into Period completion date NQF level
A – disabled 1 January 2016 24 months 31 December 2017 8
B – not disabled 1 January 2018 12 months 31 December 2018 4
All learnership agreements are registered and comply with all the necessary requirements.
3. Bad debts and doubtful debt allowance
Bad debts written off Bad debts recovered List of doubtful List of doubtful
during the 2018 year of (previously written debts at debts at
assessment off) 28 February 2017 28 February 2018
R76 000 R23 300 R128 000 R176 000
4. Research and development
Mega Group (Pty) Ltd researched and developed a completely new product to help with pre-
schoolers’ pencil grip before starting with school. Research on the new product commenced on
1 June 2017 (when the application for approval was submitted) and the required approval for the
project was obtained on 1 September 2017. From 1 June 2017 to 28 February 2018 operating
research costs amounted to R211 000 and salaries paid to administrative staff amounted to
R1 025 000. On 1 September 2017 after the approval was obtained, Mega Group (Pty) Ltd purcha-
sed a new manufacturing machine for R760 000 to be used solely in the manufacturing of this new
product. The company funded the research project.
5. Storage rental
On 1 December 2017, Mega Group (Pty) Ltd paid an amount of R164 000 in advance for the rental
of a storage unit that Mega Group (Pty) Ltd is using for the 12-month period starting on 1 December 2017.27 TAX3701/101
ASSIGNMENT 2: FIRST SEMESTER
6. Fixed assets
Machine AA, a machine used directly in the process of manufacturing, was purchased second-
hand on 1 November 2017 for R455 500 (including VAT) and was brought into use on
1 January 2018.
An office computer with a cost price of R5 500 and a tax value of R2 000 was donated to the
office secretary on 31 July 2017. It had a market value of R3 500 on 31 July 2017.
A delivery vehicle was purchased on 31 May 2015 for R219 700. This vehicle is utilised to
deliver stationery to the different retail stores across the country. The vehicle was brought into
use on the same day.
Mega Group (Pty) Ltd sold an outdated manufacturing machine BB on 1 February 2018 for
R220 000. It was originally purchased, new, on 1 August 2016 for R430 000 and brought into
use on 1 October 2016.
Mega Group (Pty) Ltd purchased a new manufacturing machine CC for R350 000 to replace
the old machine BB that was sold on 1 February 2018 (refer to the previous point). The new
manufacturing machine CC was purchased on 26 February 2018 and brought into use on
1 March 2018. (Mega Group (Pty) Ltd did not elect that the provisions of paragraph 66 of the
Eighth Schedule should apply)
On 30 September 2017, Mega Group (Pty) Ltd purchased part of a new office block for
R550 000 to be used as its administration offices.
7. Leasehold improvements and lease premium
On 1 August 2017, Mega Group (Pty) Ltd entered into a lease agreement with PropCo (Pty) Ltd for
a period of ten years, with the option to extend the contract for another five years. In terms of the
contract, Mega Group (Pty) Ltd had to effect improvements on the premises to the value of R390 000.
The building improvements commenced on 1 September 2017, were completed on 1 January 2018,
and brought into use on the same day. The total cost of the improvements was R410 000.
In terms of the contract, Mega Group (Pty) Ltd had to pay a monthly rental of R18 000, which is
payable from 1 August 2017.
A lease premium of R100 000 was also paid by Mega Group (Pty) Ltd on 1 August 2017.
8. Donation
Mega Group (Pty) Ltd donated R21 000 to a local church and received the relevant section 18A
certificate.
9. Assessed loss
Mega Group (Pty) Ltd incurred an assessed loss of R87 000 during the 2017 year of assessment.
10. Other information
Mega Group (Pty) Ltd elects the section 11(o) scrapping allowance.
Binding general ruling No. 7 lists the following write-off periods. Apply it where applicable.
Delivery vehicle 4 years
Computers – (other than main frame) 3 years28 TAX3701/101
ASSIGNMENT 2: FIRST SEMESTER
REQUIRED: MARKS
Calculate the tax liability of Mega Group (Pty) Ltd for the year of assessment ending on
28 February 2018. 40
You must start your calculation with the taxable income of R3 123 321, taking into account
the above-mentioned transactions for taxation purposes only. Show all your calculations
clearly.
END OF ASSIGNMENT 229 TAX3701/101
ASSIGNMENTS FOR SECOND SEMESTER STUDENTS
SUBMISSION OF ASSIGNMENT 1 IS COMPULSORY TO OBTAIN ADMIS-
SION TO THE EXAMINATION. ADMISSION WILL BE OBTAINED BY SUBMIT-
TING THE ASSIGNMENT AND NOT BY THE MARKS YOU OBTAINED FOR
IT. THIS ASSIGNMENT WILL COUNT A MAXIMUM OF 5% OF YOUR FINAL
MARKS.
PLEASE ENSURE THAT THIS ASSIGNMENT REACHES THE UNIVERSITY
ON OR BEFORE THE DUE DATE SINCE LATE SUBMISSION WILL RESULT
IN YOUR NOT BEING ADMITTED TO THE EXAMINATION. NO CORRE-
SPONDENCE OR TELEPHONIC CONVERSATION WILL BE ENTERED INTO
IN THIS REGARD.
IF YOU INTEND TO POST YOUR ASSIGNMENT, MAKE A COPY OF IT BE-
FORE YOU POST IT TO UNISA, IN CASE YOUR ASSIGNMENT IS LOST IN
THE POST.
WE ADVISE YOU, IF POSSIBLE, TO SUBMIT YOUR ASSIGNMENT ELEC-
TRONICALLY IN PDF FORMAT.
IMPORTANT INFORMATION REGARDING MULTIPLE-CHOICE QUESTIONS:
(1) You must answer all questions on a mark-reading sheet or submit them electronically via the
myUnisa online system.
(2) Before completing the mark-reading sheet, study the instructions in Study @ Unisa. Read these
instructions carefully and follow them exactly to avoid mistakes.
(3) Do your calculations on a separate piece of paper before completing the mark-reading sheet.
(4) There is only one correct answer to each question.
(5) All questions are equal in value.30 TAX3701/101
SECOND SEMESTER
ASSIGNMENT 1 (30 marks, 54 minutes)
MODULE DUE DATE UNIQUE NUMBER
TAX3701 10 AUGUST 2018 843499
ASSESSMENT CRITERIA FOR THIS ASSIGNMENT
For this assignment, you will need to have achieved the learning objectives set out in learning units
1 to 4 as contained in Tutorial Letter 102/3/2017. This assignment will assess your ability to select
the alternative that best reflects the quantitative/qualitative solution to a problem. This assignment will
count a maximum of 5% towards your final mark.
REQUIRED: MARKS
Select the option ((1) – (4)) that represents the correct answer to the question.
(The mark-reading sheet has five options; please ignore option 5 for each question in 30
this assignment.)
ASSIGNMENT 1: SEMESTER 2
Nomzile Jewellers Pty (Ltd) (Nomzile) is a South African jewellery company that imports jewellery from
overseas to resell locally. Nomzile is registered for value-added tax (VAT) on the invoice basis and it has
a two-month tax period. The following amounts relate to receipts and payments for the two-month tax
period ending 28 February 2018.
Where applicable, all amounts are inclusive of VAT, unless otherwise stated.
Receipts Notes R
Cash sales 280 000
Credit sales 653 600
Loan from ZA Bank 1 250 000
Equity contributions from shareholders 1 320 000
Indemnity payment 2 135 000
Payments
Import of stock 3 328 500
Purchase of a building 4 625 000
Sundry payments 5 24 700
Notes:
1. Nomzile has stores throughout the country. During January 2018, the company opened two new
stores, one in Johannesburg and another one in Durban. To finance the expansion, the company
acquired a loan of R250 000 from ZA Bank and received equity contributions of R320 000 from the
company’s shareholders.You can also read
