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The higher rate of tax is 40 per cent, so how can anyone benefit from electing for the composite rate?

April 26, 2017benefit Composite Electing rate tax

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The higher rate of tax is 40 per cent, so how can anyone benefit from electing for the composite rate?

2 Answers

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Firstly, the Composite Rate Option allows a simple and quick method of calculation of liability. Secondly, certain transactions may attract tax on more than one head of duty and hence the effective rate may be greater than 40 per cent.

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Firstly, the CRO allows a simple and quick method of calculation of liability. Secondly, certain transactions may attract tax on more than one head of duty and hence the effective rate may be greater than 40 per cent.