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Tax on Fixed Asset Disposal

Proceeds of fixed asset disposal are subject to VAT but not subject to Prepayment of Income Tax.

Example 

ABC Company sold computers as fixed assets and got proceeds of $2,200 included any taxes.

Required 

Calculate taxes paid to tax officer.

Answer 

  • VAT = ($2,200/1.1) x 10% = $200
  • Prepayment of income tax is not taxable because it is not turnover or main business.

 

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