Foundations in
Taxation
(Malaysia)
Pilot Paper
Time allowed:
Writing: 2 hours
This paper is divided into two sections:
Section A – ALL TEN questions are compulsory and MUST be attempted
Section B – ALL NINE questions are compulsory and MUST be
attempted
Tax rates and allowances are on pages 2–4
Do NOT open this paper until instructed by the supervisor.
You must NOT write in your answer booklet until instructed by
the supervisor.
This question paper must not be removed from the examination hall.
The Association of Chartered Certified Accountants
PaperFTX(MYS)
FOUNDATIONS IN ACCOUNTANCY
SUPPLEMENTARY INSTRUCTIONS
1
2
3
Calculations and workings should be made to the nearest RM.
All apportionments should be made to the nearest whole month.
All workings should be shown.
TAX RATES AND ALLOWANCES
The following tax rates, allowances and values to be used in answering the questions.
Income tax rates
Resident individuals
Chargeable income
RM
First
2,500
(0 – 2,500)
Next
2,500
(2,501 – 5,000)
Next
15,000
(5,001 – 20,000) Next
15,000
(20,001 – 35,000)
Next
15,000
(35,001 – 50,000)
Next
20,000
(50,001 – 70,000)
Next
30,000
(70,001 – 100,000)
Exceeding
100,000
Resident company
Paid up ordinary share capital
First
RM500,000
RM2,500,000 or less
20%
More than RM2,500,000
25%
Non-residents
Company
Individual
2
Rate
%
0
1
3
7
12
19
24
26
Cumulative tax
RM
0
25
475
1,525
3,325
7,125
14,325
Excess over
RM500,000
25%
25%
25%
26%
Personal reliefs and allowances
Self
Disabled self, additional
Medical expenses expended for parents
(maximum)
Medical expenses expended on self, spouse or child with serious disease,
including up to RM500 for medical examination
(maximum)
Basic supporting equipment for disabled self, spouse, child or parent
(maximum)
Purchase of sports equipment
(maximum)
Fees expended for skills or qualifications
(maximum)
Expenses on books for personal use
(maximum)
Spouse relief
Disabled spouse, additional
Child
(each)
Child – higher rate
(each)
Disabled child (each)
Disabled child – additional
(each)
Life insurance premiums and contributions to approved funds
(maximum)
Deferred annuity premiums
(maximum)
Medical and/or education insurance premiums for self, spouse or child
(maximum)
Purchase of a personal computer
(maximum)
Broadband subscription (maximum)
Deposit for a child into the National Education Savings Scheme
(maximum)
RM
9,000
6,000
5,000
5,000
5,000
300
5,000
1,000
3,000
3,500
1,000
4,000
5,000
4,000
6,000
1,000
3,000
3,000
500
3,000
Rebates
Chargeable income not exceeding RM35,000
Individual Rate for an individual entitled to a deduction in respect of a spouse or former wife
Value of benefits in kind
Car scale
Cost of car
(when new)
RM
Up to 50,000
50,001 to 75,000
75,001 to 100,000
100,001 to 150,000
150,001 to 200,000
200,001 to 250,000
250,001 to 350,000
350,001 to 500,000
500,001 and above
Prescribed annual value
of private usage of car
RM
1,200
2,400
3,600
5,000
7,000
9,000
15,000
21,250
25,000
The value of the car benefit equal to half the prescribed annual value (above) is taken if the car
provided is more than five (5) years old.
Where a driver is provided by the employer, the value of benefit per month is fixed at RM600.
3
RM
400
800
Other benefits
RM per month
Household furnishings, apparatus and appliances
Semi-furnished with furniture in the lounge, dining room, or bedroom
70
Semi-furnished with furniture as above plus air-conditioners and/or curtains and carpets
140
Fully furnished premises
280
Domestic help
400
Gardener
300
Capital allowances
Industrial buildings
Plant and machinery – general
Motor vehicles and heavy machinery
Office equipment, furniture and fittings
Initial allowance (IA)
Rate %
10
20
20
20
Annual allowance
(AA)
Rate %
3
14
20
10
Real property gains tax
Disposal by companies and other than companies
Date of disposal
Disposal within two years after date of acquisition
Disposal in the third year after date of acquisition
Disposal in the fourth year after date of acquisition
Disposal in the fifth year after date of acquisition or thereafter
Note: An exemption is granted which reduces the effective rate to 5% where the
disposal takes place within five years of the date of acquisition and to nil thereafter.
Rate %
30
20
15
5
Sales and service tax
Sales tax
Service tax
Rate %
10
6
4
Section A – ALL TEN questions are compulsory and must be attempted
Please use the space provided on the inside cover of the Candidate Answer Booklet to indicate your chosen answer to
each multiple choice question.
1
Trisha, an expatriate from Egypt, was employed by a company in Malaysia. She commenced employment on 1 January
2011 and worked in the company for four months and ceased employment on 30 April 2011. She returned to Egypt
on the same date. During her stay she was physically present in Malaysia and she never returned to Malaysia in 2011.
Her salary was RM2,500 per month. She was not married.
How much is Trisha’s income tax liability for the year of assessment 2011?
A
B
C
D
2
Rosliza legally adopted a child during the year of 2011. The child was two years old and the child’s expenses were
maintained by her during the year of assessment 2011.
What is the amount of child relief Rosliza can claim for her adopted child for the year of assessment 2011?
A
B
3
Hari and Mei Lee run a florist shop as a partnership. The agreed profit sharing ratio was 25:75. On 1 July 2011, the
partners agreed to change the profit sharing ratio and the profits were to be shared equally. The provisional divisible
income for the year of assessment 2011 was RM20,000.
What is the share of divisible income that would be allocated to each partner for the year of assessment 2011?
A
B
C
D
4
Germaine is a musical composer, and during the year ended 31 December 2011 she earned royalties amounting to
RM22,000 from her musical composition. It was confirmed that this income was not part of her emoluments in the
exercise of her official duties.
What is the amount of royalty income assessable to tax for Germaine for the year of assessment 2011?
A
B
C
D
Nil
RM2,600 RM260
RM175 (3 marks)
RM4,000
RM1,000
(1 mark)
Hari: RM5,000; Mei Lee: RM5,000
Hari: RM10,000;Mei Lee: RM10,000 Hari: RM7,500; Mei Lee: RM12,500
Hari: RM12,500;Mei Lee: RM7,500
(3 marks)
RM2,000
RM22,000
RM10,000
RM12,000
(2 marks)
5
5 Flora Sdn Bhd received an additional assessment in respect of the year of assessment 2009 arising from a tax audit on
1 March 2011. The company’s tax manager does not agree with the additional assessment issued and wants to lodge
an objection against the assessment.
By what date must Flora Sdn Bhd lodge an objection against the additional assessment for the year of assessment
2009?
A 30 March 2011
B 28 April 2011 (1 mark)
6 Amazon Sdn Bhd commenced leased rental for a passenger vehicle that was to be used by the company’s managing
director.
The following details relate to the year of assessment 2011 based on the financial year ended 31 December 2011:
BMW – on the road price
Total lease rentals paid during the year
RM
165,000
110,000
What is the amount of lease rentals paid during the year that are available for tax deduction for Amazon Sdn Bhd
for the year of assessment 2011?
A
B
C
D
7
Triton Sdn Bhd has an accounting year end of 31 December, and on 1 January 2011 acquired a van for RM90,000
which was registered as a commercial vehicle licensed to transport goods. The company acquired the van on hire
purchase and paid a deposit of RM10,000. The capital portion paid during the year in addition to the deposit was
RM80,000 and the interest portion paid was RM1,000.
What is the qualifying expenditure that can be claimed for capital allowances purposes in respect of the van for
the year of assessment 2011?
A
B
C
D
8
Which one of the following statements is TRUE?
RM60,000
RM165,000
RM50,000
RM100,000 (2 marks)
RM50,000
RM80,000
RM91,000
RM90,000 (3 marks)
A
When a reduced assessment is issued to a taxpayer, it generally means that the taxpayer is required to pay
additional taxes.
B
Unutilised capital allowances carried forward are available for set-off against any business source income and not
only for the same business source.
C
Unabsorbed business losses carried forward are available for set-off against the same business source only and
not against any other business source income.
D Interest income derived by a non-resident person is subject to withholding tax at the rate of 15% of the gross
income.
(2 marks)
6
9
Tunis Sdn Bhd was incorporated on 1 January 2011 to provide management and consultancy services.
What is the minimum threshold for the management and consultancy services for the purposes of applying for a
service tax licence under the service tax legislation?
A
B
C
D
Nil threshold
RM150,000
RM300,000
RM3,000,000 (2 marks)
10 Snow Sdn Bhd recently moved into its new business premises and will be changing its address.
Under the Income Tax Act, 1967, by what date must Snow Sdn Bhd notify the Director General Inland Revenue
of the change of address?
A
B
Within one month
Within three months
(1 mark)
(20 marks)
7
Section B – ALL NINE questions are compulsory and MUST be attempted
1
Sanjay ran a luxury car business and due to cashflow problems, decided to close down his business on 31 March
2011. The current year adjusted loss for the year of assessment 2011 was computed to be RM10,000.
He commenced employment on 1 April 2011 as a director in a hotel in Malaysia.
Details relating to Sanjay’s income, benefits and expenditure for the year to 31 December 2011 are as follows:
Income
Salary
Bonus RM
130,000
20,000
Benefits provided by employer
Car benefit – New MPV costing 120,000
Car provided from 1 April 2011
Leave passage – local trip to Penang
3,100
Domestic help provided by employer from 1 April 2011 – salary 4,500
Expenditure
Contributions to the Employees’ Provident Fund
Life insurance premiums – self
Sanjay received total interest of RM3,000 for the year of assessment 2011 which was made up of interest on fixed
deposit of RM350 from a Malaysian bank and interest of RM2,650 from a loan to his sister for the year of assessment
2011.
Required:
Compute Sanjay’s chargeable income and income tax payable for the year of assessment 2011.
12,100
3,100
Notes:
(1) You should indicate by the use of the word ‘nil’ any item referred to in the question for which no adjusting entry
needs to be made in the tax computation.
(2) Marks will be awarded for the use of accurate technical terms to describe the figures comprising the stages in
the computation of chargeable income.
(15 marks)
8
2 Divine Sdn Bhd is in the business of operating a houseboat in a resort and closes its accounts to 31 December
annually.
Relevant information of the company’s profit and loss account for the year ended 31 December 2011 is shown below:-
RM
Sales Less: Cost of sales Gross profit Add: Other income
Dividend income remitted from China
Less: Expenses
Foreign exchange loss – trade related and realised 50,000
Leave passage for directors – overseas trip
6,000
Professional fees for company secretary 5,000
Depreciation 13,000
Entertainment of suppliers 12,000
Other deductible expenses 144,000
Profit before tax
RM
1,600,000
(800,000)
800,000
10,000
810,000
(230,000)
580,000
Additional notes relevant to the tax computation are as follows:
i) During the year ended 31 December 2011, the company acquired office furniture comprising table and chairs
costing RM100,000. It was confirmed that each asset costs more than RM1,000 and the claim for small value
assets does not apply. The residual expenditure for the brought forward assets was nil.
ii) Unabsorbed losses brought forward from the previous year of assessment was RM10,000.
iii) The company’s issued paid-up share capital is RM2,000,000.
Required:
Compute the chargeable income and the income tax payable of Divine Sdn Bhd for the year of assessment
2011.
Notes:
(1) You should indicate by the use of the word ‘nil’ any item referred to in the question for which no adjusting entry
needs to be made in the tax computation.
(2) Marks will be awarded for the use of accurate technical terms to describe the figures comprising the stages in
the computation of chargeable income.
(15 marks)
9
3 Su San acquired an office building on 12 January 2009 for investment purposes for RM820,000. She incurred
renovation expense of RM20,400 as part of the building’s enhancement cost and also paid stamp duty of RM18,600.
The total quit rent and assessment per year is RM800.
In 2010, she received an insurance compensation of RM10,000 arising from damage to the building.
She disposed of the office building and signed a sales and purchase agreement on 12 September 2011 based on
a valuation of RM900,000. The valuation fee was RM2,000 and the agency commission fee for the disposal was
RM1,000.
Required:
Compute the chargeable gain subject to real property gains tax arising to Su San from the disposal of the office
building. Clearly show the disposal price and the acquisition price taking into account all necessary adjustments.
Note:
(1) You are not required to compute the real property gains tax.
(2) You should indicate by the use of the word ‘nil’ any item referred to in the question for which no adjusting entry
needs to be made in the computation.
(10 marks)
4 Greenhill Sdn Bhd is a manufacturing company and closes its accounts annually on 31 December. The company
acquired a factory building for RM1,500,000 during the year of assessment 2010.
In 2011, the company extended the factory building and incurred the following capital expenditure:
Levelling of land Design fee for factory Construction cost for factory extension
RM
10,000
18,000
102,000
130,000
Required:
Determine the qualifying building expenditure and calculate the industrial building allowance for the years of
assessment 2010 and 2011 for
(a) The original factory building acquired in 2010; and
(b) The extension made to the factory building in 2011.
(4 marks)
(6 marks)
(10 marks)
10
5
Skysoft Sdn Bhd manufactures computer covers for computers. The company is licensed for sales tax purposes and its
products are subject to sales tax at 10%.
The selling price of each product is RM10 and cost of each product is RM8.
Relevant details relating to sales are as follows:
January 2011
Gross sales value for the month
Payments received February 2011
Gross sales value for the month
Payments received March 2011
Gross sales value for the month
Payments received April 2011
Gross sales value for the month
Payments received Required:
RM
1,000,000
55,000
1,000,000
110,000
900,000
120,000
700,000
90,000
Calculate the amount of sales tax payable by Skysoft Sdn Bhd, and state the due date to remit the sales tax for
each of the taxable period/periods shown above.
(6 marks)
6 Lara, a Malaysian, was seconded to his employer’s Thailand office on 1 January 2008. The nature of his job required
to him to perform duties both in Malaysia and in Thailand.
Lara’s secondment ended and he returned to Malaysia on 30 September 2010.
Based on the travel schedule prepared based on his passport, the following information was obtained:
Year No of days in Malaysia 2006
95 days 2007 365 days 2008
190 days 2009
185 days 2010
90 days 2011
0 days 2012 365 days Required:
Resident status /
Non-resident
Resident
Resident
Resident
To be determined
To be determined
Expected to be resident
Determine, with reasons, Lara’s tax resident status for the years of assessment 2010 and 2011.
11
(6 marks)
7 Ira owned a hilltop house in Kuala Lumpur which she rents out to a tenant who is an expatriate. This was the only
property she owned.
Details of her rental income and expenditure for the year ended 31 December 2011 are shown below.
Gross income from rental
RM
Less: Expenditure
Quit rent and assessment
1,600
Interest on housing loan (see note 1 below)
3,200
Replacement of old air-conditioner
500
New fridge for expatriate tenant (see note 2 below) 1,500
Agent’s commission for collection of rent 1,200
Net income RM
24,000
(8,000)
16,000
Note 1: The above interest includes cheque book charges of RM200.
Note 2: Ira brought the fridge for the first time for her house in Kuala Lumpur.
Required
Calculate the statutory income arising from the rental income for the year of assessment 2011.
Note:
You should indicate by the use of the word ‘nil’ any item referred to in the question for which no adjusting entry
needs to be made in the computation.
(6 marks)
8 Below is information with regards to Star Sdn Bhd’s tax matters.
New employee
One new employee commenced employment on 1 March 2011. The new employee is likely to be chargeable to tax.
Instalment scheme and tax payable for the year of assessment 2011
Initial tax estimate notified to the Inland Revenue Board Final tax liability per tax computation to the Inland Revenue Board RM
100,000
300,000
Required
(a) State the due date for Star Sdn Bhd to notify the Inland Revenue Board (IRB) of an employee who has
commenced employment and is likely to be chargeable to income tax. (1 mark)
(b) State the due date for Star Sdn Bhd to remit the employees’ schedular tax deduction (STD) deducted from the
employees’ March 2011 salary. (1 mark)
(c) Compute the penalty for the excessive difference between the estimated tax and final tax payable for the year
of assessment 2011 by Star Sdn Bhd.
(4 marks)
(6 marks)
12
9 (a) Martha is a retired Government servant and her income for the year of assessment 2011 is shown below.
RM
Interest income from loan extended to friend’s company
300
Pension from the Government (no other pension) 12,000
Franked dividend from local listed company (net) (taxable) 750
Dividend from shares invested in overseas company 2,000
Required
State whether the above income is taxable or tax exempt.
(2 marks)
(b) Below is an extract from page 2 of a tax return for an individual without business (FORM BE)
Part C: Statutory Income and Total Income
Amount (RM)
C1 Employment
C2 Dividends
C1 C2 C3 Interest and discounts C3 C4 Rents, royalties and premiums C4 C5 Pensions, annuities and other periodical payments
C5 Required
In your answer booklet, state the amounts that would be entered in boxes C2, C3, and C5 only. Indicate “0”
if there is no amount to be inserted in the box.
Note: you should show all workings.
(4 marks)
(6 marks)
End of Question Paper
13
Answers
14
Pilot Paper FTX (MYS)
Foundations in Taxation (Malaysia)
Answers and marking scheme
Notes:
(1) All references to legislation or public rulings shown in square brackets are for information only and do not form part of the answer
expected from candidates.
(2) Marks indicated with a ‘*’ are awarded for the allocation of the appropriate description to the figure calculated, not for the figure itself.
Section A
1 B
Marks
Trisha was physically present in Malaysia only for 120 days during the year of assessment 2011. She was a
non-resident [under Section 7 of the Income Tax Act, 1967] and will not be entitled to any personal relief and also
not entitled to the scale rates to calculate her income tax liability. She will be taxed as a non-resident at a flat
rate of 26% on the gross income. Therefore, her income tax is RM2,600 [(RM2,500 x 4 = RM10,000) x 26%]. 2 B Rosliza is entitled to claim child relief of RM1,000 for the year of assessment of 2011 even if the child is
adopted. She is entitled to claim child relief for the adopted child as long as the adoption was carried out legally. 3
1
3 C Hari’s share is RM7,500 and Mei Lee’s share is RM12,500 for the year of assessment 2011. Share of divisible income from 1 June 2011 to 30 June 2011 (6 months) 6/12 x 20,000 = RM10,000
Profit sharing ratio 25:75 1 July 2011 to 31 December 2011 (6 months) 6/12 x 20,000 = RM10,000
Profit sharing ratio 50:50
Total for each partner for year of assessment 2011
Hari
RM
2,500
5,000
7,500
Mei Lee
RM
7,500
5,000
12,500
3
4 A An exemption of RM20,000 is available to be set-off against royalty income from musical composition [under
paragraph 32D of Schedule 6 of ITA, 1967]. Therefore, the amount assessable to income tax for the royalty
income for the year of assessment is RM2,000 (RM22,000 – RM20,000) 2
5 A A taxpayer who wishes to lodge an appeal against any assessment has to do so within 30 days of the date of
issue of the assessment with the Director General Inland Revenue. Therefore, the company has to lodge an
appeal against the additional assessment for the year of assessment 2009 on or before 30 March 2011. 1
6 C
The maximum amount available for a tax deduction is RM50,000. This is because [under Section 39(1)(k) of
the ITA, 1967], where the on-the-road cost of the vehicle exceeds RM150,000 then the maximum lease rentals
allowable as a deduction is restricted to RM50,000. In the case where the on-the-road cost of the vehicle is below
RM150,000 then the claim can be restricted to RM100,000 or the actual cost of the vehicle if it is lower than
RM100,000. 2
7 D Triton Sdn Bhd can claim capital allowances for the amount of deposits and capital portion of the instalments
paid during the year of assessment 2011. There is no restriction on the cost as the van is a licensed commercial
vehicle. The qualifying expenditure for the van, that is available for the claim of capital allowances, is RM90,000.
3
8 D
2
Generally, when a reduced assessment is issued to a taxpayer, it means that the taxpayer is assessed on income
that is lower compared to the original or additional assessment raised earlier and under normal circumstances,
the taxpayer will be due for a refund of the excess tax paid. There will be no additional taxes to be paid under
normal circumstances when a reduced assessment is issued. Unutilised capital allowances carried forward is
available for set-off only against the same business source and not against any other business source. Unabsorbed
losses carried forward is available for set-off against any business source and is not restricted to the same business
source. Therefore, statements A, B and C are false. Interest income derived by a non-resident person is subject to a
withholding tax of 15%. Therefore, statement D is true.
15
9 A Nil threshold. There is no minimum threshold amount for any person who is in the business of providing
management and consultancy services. This means even if there is a billing for RM1, there is a requirement
to apply for a service tax licence before providing such services. This is provided for under Group G – other
service providers of the second schedule of the Service Tax Regulations [under Service Tax Act, 1975].
10 B Snow Sdn Bhd will be required to notify the Director General Inland Revenue by notice in writing within three
months of change of address. Marks
2
1
20
Section B
1
Sanjay
Tax computation for the year of assessment 2011
RM
RM
Employment income
Salary and bonus 150,000 Car benefit as per table – annual value 5,000 Car used from 1 April to 31 December 2011= 9 months 5,000 x 9/12 3,750 Leave passage – (local trip)
Nil Domestic help (400 x 9)
3,600 Adjusted/statutory income from employment 157,350 Interest income (3,000 – 350) 2,650
Aggregate income
160,000
Less: Current year adjusted loss from business
(10,000) Total income 150,000
Less: Personal reliefs
Personal relief 9,000
Employee’s Provident Fund (EPF) contributions (restricted to maximum) 6,000 (15,000)
Chargeable income
135,000
Tax liability:
Tax on first RM100,000
14,325
Tax on next RM35,000 x 26%
9,100
Tax charged /payable
23,425
16
0.5
1
2
1
2
*0.5
1.5
*0.5
1.5
*0.5
1
1.5
*0.5
1
15
2 Divine Sdn Bhd
Tax computation for year of assessment 2011
RM
RM
Profit before tax
580,000
Add/(Less)
Dividend income from China (foreign source income is exempt) (10,000) Foreign exchange loss – trade and realised Nil Leave passage 6,000 Professional fees for company secretary 5,000
Depreciation
13,000 Entertainment expenses (50% x 12,000) 6,000 Adjusted income
600,000
Less: Capital allowances
Current year assets
Cost/Qualifying Expenditure 100,000 – Initial allowance 20% x 100,000
20,000 – Annual allowance 10% x 100,000 10,000 (30,000)
Statutory income 570,000 Less: Unabsorbed losses brought forward (10,000) Aggregate income/chargeable income 560,000 Tax liability
Tax on first RM500,000 at 20% 100,000
Tax on excess of RM60,000 at 25% 15,000 Tax charged/payable 115,000
Marks
0.5
1.5
1
1
1
1
2
*0.5
0.5
1
1
*0.5
1.5
*0.5
1.5
Tutorial note: For a SME (small and medium enterprise) company with issued share capital of RM2,500,000 or less,
the scaled tax rates are available.
15
3 Su San – Computation of chargeable income
RM
Disposal consideration
Less: Permitted expenditure
Enhancement costs – renovation expense
Incidental costs:
Valuation fees
Agent’s commission
Disposal price
RM
900,000
0.5
(20,400)
1.5
(2,000)
(1,000)
1
1
876,600
Less: Acquisition consideration
820,000 Less: Insurance compensation for damage to office building (10,000) Add: Incidental expenses relating to acquisition:
Quit rent and assessment (not eligible for deduction) Nil
Stamp duty
18,600
Acquisition price
(828,600)
Chargeable gain
48,000
Less: Schedule 4 exemption for individual
Higher of the following:
(i) 10% of Chargeable gain 10% x RM48,000
4,800
(ii) RM10,000
10,000
(10,000)
Chargeable gain
38,000
17
0.5
1.5
1
1
2
10
4 Greenhill Sdn Bhd – Industrial building allowance
Marks
(a) Industrial building allowance (IBA)
Assets acquired in 2010
RM
RM
Qualifying building expenditure 1,500,000 Less: IBA for YA 2010
Initial allowance 10%
150,000 Annual allowance 3%
45,000
(195,000) Residual expenditure
1,305,000
Less: IBA for YA 2011
Annual allowance 3% x 1,500,000
(45,000) Residual expenditure
1,260,000
(b) Assets acquired in 2011
Qualifying building expenditure for factory extension
Levelling of land non-qualifying relates to land
0
Design fee for factory 18,000 Construction cost of factory 102,000 Qualifying building expenditure
120,000
Less: IBA for YA 2011
Initial allowance 10%
12,000 Annual allowance
3%
3,600
(15,600)
Residual expenditure
104,400
5
1
1
1.5
4
1
1
1
1.5
1.5
6
10
Skysoft Sdn Bhd – Sales tax
Taxable period Amount of sales tax
Payment due date for sales tax
RM
January 2011 1,000,000
February 2011
1,000,000 Total for taxable period 2,000,000
Sales tax – 10% x 2,000,000 200,000 Due on or before 28 March 2011 March 2011 900,000
April 2011
700,000 Total for taxable period
1,600,000
Sales tax – 10% x 1,600,000
160,000 Due on or before 28 May 2011
6
0.5
0.5
0.5
1+1
0.5
0.5
1+1
6
Lara – Resident status
Year of assessment Resident status
2010
Resident
Basis
He was in Malaysia for 90 days during the year of assessment 2010 and was resident in three out of the immediately four preceding basis years [under Section 7(1)(c) of ITA, 1967], ie he was resident for the
years of assessment 2007, 2008 and 2009.
2011
Resident
He was resident in the following year of assesment (year of assessment 2012) and was resident in the immediately three preceding basis years [under Section 7(1)(d) of ITA, 1967], ie he was resident for the years of
assessment 2008, 2009 and 2010.
18
1+ 1
1
1+1
1
6
7 Ira – Rental Income
RM
RM
Gross rental income
24,000
Less: Allowable expenses
Quit rent and assessment
1,600
Interest on housing loan (3,200–200) 3,000
Maintenance expenses
Replacement of old air-conditioner
500 – New fridge for expatriate tenant
0
Agent’s commission for collection of rent 1,200
(6,300)
Adjusted income/statutory income from rental under s 4(d) of the ITA, 1967
17,700
8
Marks
0.5
1
1.5
1.5
1
6
Bright Sdn Bhd – Compliance
(a) The due date for Star Sdn Bhd to notify the Inland Revenue Board of an employee who has commenced
employment and is likely to be chargeable to income tax , is within a month of commencement of employment.
Therefore, the due date would be one month from 1 March 2011, ie on or before 31 March 2011.
(b) The due date for Star Sdn Bhd to remit the schedular tax deducted to the Inland Revenue Board is by the 10th
of the following month. Therefore, the due date for the schedular tax deducted relating to the March 2011 salary
to be remitted to the Inland Revenue Board is on or before 10 April 2011. (c) Penalty for the excessive difference
Final tax as per tax computation submitted
Estimated tax Difference
Less: 30% of final tax (30% x 300,000)
Excess
1
1
RM
300,000
100,000
200,000
(90,000)
1
1.5
1.5
110,000
Penalty at 10% thereon 10% x 110,000
11,000
9 (a) Martha – Self-assessment tax return entries
RM
Taxable/Exempt
Interest income from loan extended to friend’s company 300
Taxable
Pension from the Government 12,000 Tax Exempt
Franked dividend from local listed company (net) 750 Taxable
Dividend from shares invested in overseas company 2,000 Tax Exempt
(b) Box C2
RM1,000
Net dividends
RM750 Tax deducted 25% x 1,000 RM250
Gross amount (RM750/0.75) RM1,000
Box C3
RM300
Box C5
RM0
0.5
4
6
0.5
0.5
0.5
0.5
2
2
1
1
Tutorial note: The gross dividend amount of RM1,000 is determined as follows:
Gross dividend income = Net dividend income x 1 = RM750 x 1 = RM750 x 1 = RM1,000
(1-CT*) (1-0.25) 0.75
*CT – Where CT is the current year’s tax rate for corporations (which is currently 25%).
19
4
6