TOPIC 1: BASIS PERIOD

TOPIC 1: BASIS PERIOD. PRESENTED BY: MARIUS BENEDICT.

White DNA structure. BASIS PERIOD. @MB. INTRODUCTION.

LESSON OUTCOMES. Determine the basis period for commencement of business..

COMMENCEMENT OF BUSINESS. First set of account = 12 months.

S21A(4) Commencement. Accounting Period < 12 mths & Ended in the same year.

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ADDITIONAL SECTIONS. Remote learning language outline.

Basis period (BP)-Section 21A(1) The basis year for a YA constitute the basis period for that YA Applies to all sources of income, but not necessarily to business income i.e. YA2021 – calendar year 2021 BY2021 – Basis Period 1 January – 31 December Example A company which has a business source and a dividend source prepares its accounts from 01.01.2021 to 31.12.2021. (12 months and ending on 31/12) The basis year ending 31.12.2021 is the basis period for the Y/A 2020 for all of the company's sources..

Section 21A (2): Subject to subsections (5) and (6) , where a company has made up the accounts of its operations for a period of twelve months ending on a day other than 31 December in the basis year, that period shall constitute the basis period for that year of assessment for any of its sources of income. Example A company makes up its accounts from 01.07.2020 to 30.06.2021. Its sources of income are business, rental and interest. The period from 01.07.2020 to 30.06.2021 is the basis period for the Y/A 2021 for all its sources of income..

Section 21A (3): Where a company has made up the accounts of its operations for a period of twelve months ending on a day other than 31 December and there is a failure to make up the accounts of the company ending on the corresponding day in the following basis year, the Director General may direct that the basis period for the year of assessment in which the failure occurs, or the basis periods for that year and the following year of assessment, shall consist of a period or periods (which may be of any length) as specified in the direction. W.e.f YA2014 with the issuance of PR8/2014, the issue of overlapping period and income apportionment will not arise anymore..

Section 21A (5): Where a company commences operations and- is required under any law of the place of incorporation to make up its accounts ending on a specified day; or being a company within a group of companies makes up its accounts ending on the same day as that of all other companies in that group, the period which begins from the day the company commences operations until the end of the accounting period of the company shall constitute, for those operations of that company, the basis period for a year of assessment..

Public Ruling No. 7/2001 & Section 21A BASIS PERIOD FOR BUSINESS & NON-BUSINESS SOURCES (COMPANIES).

Public Ruling No. 8/2014: First Accounts Closed In The Same Year.

Public Ruling No. 8/2014: First Accounts Closed In The Same Year.

Public Ruling No. 8/2014: First Accounts Closed In The Same Year.

Public Ruling No. 8/2014: First Accounts Closed In The Following Year.

Public Ruling No. 8/2014: First Accounts Closed In The Following Year.

Public Ruling No. 8/2014: First Accounts Closed In The Following Year.

Public Ruling No. 8/2014: Accounts Made Up For More Than 12 Months And Ending In The Third Year.

Public Ruling No. 8/2014: Accounts Made Up For More Than 12 Months And Ending In The Third Year.

Public Ruling No. 8/2014: Accounts Made Up For More Than 12 Months And Ending In The Third Year.