Describe the taxes that 'Capdata' would be liable for - Leaving Cert Business - Question C - 2001
Question C
Describe the taxes that 'Capdata' would be liable for. Give reasons for your choice.
Worked Solution & Example Answer:Describe the taxes that 'Capdata' would be liable for - Leaving Cert Business - Question C - 2001
Step 1
Taxes on Corporate Profits
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Answer
Capdata, as a business entity, would be liable for corporate tax on its profits. This tax is a percentage of the company's total earnings, and it is essential for maintaining public services and infrastructure that businesses rely on.
Step 2
Value Added Tax (VAT)
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Answer
If Capdata's annual turnover exceeds a certain threshold, it would also be liable for VAT. This tax is charged on the sale of goods and services, impacting the pricing of the software solutions they provide.
Step 3
Pay As You Earn (PAYE) Tax
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Answer
As an employer with four employees, Capdata must deduct PAYE tax from employees' salaries. This ensures that income tax contributions are made on behalf of employees, fulfilling regulatory requirements and supporting public finances.
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