QUESTION
Discuss the taxation of Charitable trusts and Amateur sporting associations.
(a) (i) Charitable
trusts are exempted from taxation under the following conditions:
-
They are public in character serving a section
of the public or the whole public.
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They are for relief of distress or poverty in Kenya.
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They are for advancement of religion or
education.
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Their incomes are expended in Kenya for charitable purposes and
for benefit of Kenyan citizens.
(ii)
Amateur Sport Associations
The income (apart from their investment
income) is exempt from taxation if:
-
The members are amateurs.
-
The aim of the association is foster and
control outdoor sports.
-
It’s by-laws provide that should a member turn
professional, he ceases to be a member of the association.
WHICH AREAS SHOULD ONE PAY ATTENTION TO WHEN CONDUCTING PAYE AUDIT
(b) The areas to pay attention in auditing
of PAYE are:
-
Has the employer all the cash and non-cash
benefits or emoluments into payroll.
-
Was the correct amount of PAYE deducted?
-
Was all the PAYE deducted remitted to the tax
authorities.
-
Were the payroll records correctly transferred
to tax deduction cards.
-
Have all the tax deductions correctly completed
in all respects?
WHAT DO YOU UNDERSTAND BY THE TERM PERMANENT ESTABLISHMENT WHEN USED IN RELATION TO RESIDENCE OF A PERSON.
(c) Permanent establishment
-
This, in relation to any person (individual or
body corporate) means a fixed place of business in which a company carries on
business.
-
For the purposes of this definition, a building
site or a construction site or assembly project which has existed for six
months or more shall be deemed to be a fixed place of business.
