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ICAN Advanced Taxation 2023 past questions and answers

This 2023 ICAN Advanced Taxation set has 20 practice questions. Try these 5 free sample questions, tap a question to reveal the answer and explanation. Then practise the whole 2023 set with instant marking.

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Sample ICAN Advanced Taxation 2023 questions

1. A Nigerian company has turnover of N120,000,000 and adjusted taxable profit of N40,000,000 for the year. For this question, CITA rates are 0% for small companies with turnover not above N25,000,000, 20% for medium companies with turnover above N25,000,000 and not above N100,000,000, and 30% for large companies with turnover above N100,000,000. Assume no credits or other taxes. What is its company income tax?
  1. N12,000,000
  2. N8,000,000
  3. N40,000,000
  4. N6,000,000

Answer: A. N12,000,000

Turnover above N100,000,000 places the company in the large-company category, so tax is N40,000,000 × 30% = N12,000,000. The 20% rate applies only to medium companies.

2. A Nigerian parent owns two Nigerian subsidiaries. Subsidiary P has taxable profit of N60,000,000 and subsidiary L has a tax loss of N15,000,000. For this question, each company is taxed separately at 30% and Nigeria does not allow a general consolidated group return or group loss offset. Assume no credits or minimum tax. What is the group's current company income tax on these results?
  1. N13,500,000
  2. N18,000,000
  3. N22,500,000
  4. N0

Answer: B. N18,000,000

P pays N60,000,000 × 30% = N18,000,000. L's loss cannot be pooled against P's profit under the stated separate-company treatment, so the N13,500,000 net-profit calculation is not available.

3. A company is served with a CITA assessment on 10 July 2023 and intends to object. Assume the statutory objection period is 30 days from service and, for this question, the day after service is day one. What is the last day to lodge the written objection?
  1. 30 July 2023
  2. 8 August 2023
  3. 9 August 2023
  4. 10 August 2023

Answer: C. 9 August 2023

Counting 30 days from 11 July makes 9 August 2023 the last day. The objection period is not 30 days from the end of July.

4. A Nigerian company pays a dividend of N40,000,000 to a qualifying non-resident shareholder. Assume domestic withholding tax is 10%, but an applicable treaty, with all conditions satisfied, limits the rate to 7.5%. How much withholding tax should the payer deduct?
  1. N3,000,000
  2. N4,000,000
  3. N7,500,000
  4. N10,000,000

Answer: A. N3,000,000

The applicable treaty rate is 7.5%, so withholding tax is N40,000,000 × 7.5% = N3,000,000. Applying the domestic 10% rate despite the stated treaty relief would over-deduct tax.

5. A VAT-registered company makes taxable supplies in March 2023. Under the VAT Act rule used here, the return and payment for a month are due by the 21st day of the following month. By what date must it file and pay for March?
  1. 30 April 2023
  2. 21 April 2023
  3. 21 May 2023
  4. 31 March 2023

Answer: B. 21 April 2023

The 21st day of the month following March is 21 April 2023. The May date would apply to April transactions, not March.

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