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.