Taxation is the main topic for ACCA F6. Accountants are introduced to the concepts of the tax system. Taxation requires an individual to possess strong research skills and be able to adapt to the constant changing of rules and regulations. Tax accountants should also have a good interpersonal skill that can help dealing with clients without a tax background. In order to maintain client confidence, a person must be able to simplify complex taxation problems.
Internal Revenue Code
The internal revenue code acts as a guideline in the accounting for individual and corporate tax returns. It is a complex document that contains over 3.7 million words and it changes frequently. Every law that is passed on congress can have an effect on the internal revenue code. A tax accountant is deemed to be knowledgeable of these changes and have to continually learn the code.
ACCA F6 also includes some aspect of financial accounting since tax accountants need financial reports in order to compute for tax returns. Many companies use different valuation methods in reporting their tax, so it is important to be knowledgeable in the different methods used.
General business Knowledge
A tax accountant’s job does not end with providing the company with tax returns. Often, clients will also ask for the accountant’s advice on a year-round tax planning. It is therefore important to be able to understand the consequences of the recommendations given.
There are 8 areas in ACCA F6 syllabus
The tax system
This area tackles the basic question of taxation and its function and purpose in the modern economy. There are also different types of taxes which can be implemented on an individual or a corporation. The principal source of revenue is important in the determination of tax return. In taxation, it is important to know the difference between tax avoidance and tax evasion.
Income tax liabilities
Income tax for both employees and employers are a part of ACCA F6, as well as the determination of tax for self-employed individuals. Property and investments are also a source of tax along with the acquisition of inheritance. Tax accountants must be familiar with these concepts.
Corporation tax liabilities
The scope of corporation tax is different from individual tax so the study of which is separated. Tax accountants need to determine the taxable amount and the computation of corporation tax liability. It is also important to know how the corporate structure affects the computation of tax since a partnership and a corporation are subjected to different tax.
Chargeable gains in ACCA F6 includes the taxation of capital gains, the computation of gains and losses in selling immovable and movable property, disposal of shares of stocks and other securities and the exemptions that the business can avail of.
Inheritance tax in ACCA F6 includes the computation of transfer tax and the liabilities arising from chargeable lifetime transfers.
National Issuance contributions
This area focuses on the scope of national insurance and the different contributions for employed persons.
Value added tax
These include the scope, requirements, computation and effects of value added tax.
Obligations of tax payers
This area discusses the system of filing for returns, the time limit and the procedures to be followed. Underlying penalties are also included in the ACCA F6 syllabus.