2016年ACCA F6(CHN)真题及答案

Question:

(a)State ANY TWO major differences between a direct tax and an indirect tax.

(b)State two direct taxes and two indirect taxes levied in China.

(c)In January 2014 Tee Ltd received approval from the local tax bureau on a tax exemption application. The amount of tax which was exempt for 2014 amounted to RMB5 million. In December 2015 the tax bureau found that it had made a wrong decision.

Required:

State,with reason(s),whether the tax bureau can require Tee Ltd to pay back the amount of tax previously exempt. (2 marks)

(d)State whether the tax authorities can impose each of the following administrative actions on taxpayers:

(i)imprisonment;

(ii)stop a tax refund on exports;

(iii)stop providing VAT special invoices;

(iv)force the closure of the business of the taxpayer.

Note:

You are not required to give any reasons.

(e)Briefly explain the method the tax bureau will normally use to impose enterprise income tax on a company which has lost all of its accounting records due to a fire.

Answer:

(a)Differences between direct and indirect taxes

- A direct tax is usually levied on income or wealth of a person while an indirect tax is usually levied on the consumption of goods and services.

- The payer of a direct tax bears the tax directly and it is more difficult to shift the tax burden to another person.

- A direct tax is usually simpler to administer whereas an indirect tax is usually more complicated to administer.

- A direct tax is usually progressive whereas an indirect tax is usually regressive.

(b)Direct taxes:

- Individual income tax

- Enterprise income tax

Indirect taxes (any TWO):

- Value added tax

- Business tax

- Consumption tax

(c)The tax bureau can recover the tax wrongly exempt in 2014.

The tax bureau can recover any taxes under-collected as a result of a wrong decision made within three years;

and for under-collected amounts over RMB100,000 the time limit is extended to five years.

(d)(i)No. [Imprisonment is a criminal penalty and can only be decided by a court]

(ii)Yes.

(iii)Yes.

(iv)No. [This is the authority of the State Administration for Industry and Commerce]　　(e)The tax bureau can assess the enterprise income tax on a deemed basis by reference to the tax burden of other taxpayers involved in the same or similar industries with a similar scale of operations and a similar level of revenue.