ABC Ltd,a company based in the UAE, has the following figures from the profit and loss a/c
Revenue AED 20 million
Cost of Goods sold AED 9 million
General & Admin expenses AED 4 million
Entertainment expenses AED 300,000 (not included in G&A exp.)
Net profit AED 6,700,000
Break up of entertainment expenditure:
(1) Related to customers.shareholders and business partner AED 240,000
(2) Related to employees AED 60,000
(provided to enable them to perform their duties)
Taxable Income:
Revenue : AED 20 million
Less:
COGS : AED 9 million
G&A expenses : AED 4 million
Entertainment (1) : AED 120,000 (50%)
Entertainment (2) : AED 60,000 (100%)
Taxable profit : AED 6,820,000
Threshold : AED 375,000
Taxable @ 9% : AED 6,445,000