The Controller of Little Company Ltd

question 2

Multiple Choice

The controller of Little Company Ltd. has decided to sell a piece of capital equipment after the company's year-end in order to avoid paying tax on capital gains this year. The controller is engaging in

• A) tax avoidance.
• B) tax evasion.
• C)tax planning.
• D) GAAR.

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Definitions:

Writing Requirement

The writing requirement refers to legal stipulations that certain types of agreements or contracts must be documented in written form to be legally valid.

Drawer

A drawer is a person or entity that issues or writes a check or draft, instructing a bank or similar institution to pay a specific amount of money to a designated party.

Drawee

The party on whom a cheque or draft is drawn, responsible for paying the specified amount on the instrument.

Payee

The party in a financial transaction who receives the payment.