Lecture 2

Lecture 2 - Lecture Two Chapter (2) Salaries and The Like...

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Lecture Two Chapter (2) Salaries and The Like 1 Textbook: Tax Accounting (2)- Income Tax of Natural Persons
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Learning Objectives LO1: Identifying the nature of Salaries and the like. LO2: Determining the scope of tax and the conditions for levying the tax. LO3: Explaining the taxable revenues. LO4: Determining the taxable net revenues at the end of the year. 2
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LO 1- Nature of Revenue This revenue results from work which is performed by a person (employee) for the account of another and under his supervision and control (employer). 3
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LO2- Conditions for levying Tax Existence of an affiliation relationship between employee and his employer, through: 1- An employment contract. 2- Laws and regulations ( such as the relationship between the employee and the state ) . 4
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LO3- Scope of Tax Tax is imposed on the following: 1- Sums due to taxpayer from Source in Egypt , regardless of place of carrying out the business, whether: - In Egypt or - In abroad and it was paid for it from a source in Egypt (Egyptian Treasury ). According to this, the tax applies to: - Salaries and wages of foreign or Egyptian workers in Egyptian embassies, Consulates, Cultural and Commercial offices abroad. 5
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LO2-Scope of Tax- Cont’d 2- Sums due to taxpayer from a foreign source (Foreign treasury), Provided that the amounts was for business carried out in Egypt. 6
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LO2-Scope of Tax- Cont’d 3- Salaries and remunerations of chairman and members of Board of Directors (BOD), as follows: 7 1 st : Public Sector Companies: (Shareholding) General person owns 100% or at least 51% Capital is partially owned by general person (51%) If the person is not a shareholder S.& L. will be subjected to tax If the person is a shareholder Amounts received not subjected to tax Capital is totally owned by general person (s) (100%) Therefore, salaries of the employees (Chairman and and BOD) will be subjected to tax
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The company whose part of capital is owned by persons of private sector, salaries and remunerations of chairman Members of Boards of Directors are treated as follows: a- If the person is not a shareholder , salaries and remunerations shall be subject to tax on salaries, because he considered as employee. b- If the person is shareholder, remunerations and allowances, shall not be subjected to tax on salaries , because these amounts are not considered as deductible costs from revenues of the company, and therefore are subjected to tax as a part of net profits of the company. 8
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This note was uploaded on 03/19/2012 for the course CTRL 606 taught by Professor Mohamed during the Spring '12 term at Manor.

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Lecture 2 - Lecture Two Chapter (2) Salaries and The Like...

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