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    Revision For Test 2

    Uploaded by

    Raudhatun Nisa'
    Byeden Inc. will

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Revision For Test 2

    Uploaded by

    Raudhatun Nisa'
    20 views3 pages
    Byeden Inc. will

    Original Description:

    Original Title

    Revision for test 2

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    © © All Rights Reserved

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    Byeden Inc. will

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    20 views3 pages

    Revision For Test 2

    Uploaded by

    Raudhatun Nisa'
    Byeden Inc. will

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Revision for test 2: Agriculture allowance and Double tax agreement

    Q1

    Kulim Plantations Sdn Bhd (KPSB) (accounting date 30 June) had worked an oil palm estate
    for several years. The company had incurred the following expenses:
    RM
    1/5/2014 Expenditure on planting 35,500
    1/8/2014 Construction of estate office 10,000
    15/9/2015 Construction of employee’s quarters 60,000
    1/1/2016 Expenditure on replanting 19,000

    The estate was sold to Batu Pekaka Estate Sdn Bhd (BPESB) (accounting date 31 March)
    on 31 December 2017. The agreed prices were as follows:
    RM
    Plantation 250,000
    Estate office 10,000
    Employee’s quarters 45,000

    Required:
    Determine the qualifying agriculture expenditure and calculate the agriculture
    allowances and agriculture charges if applicable due to KPSB and BPESB up
    to the year of assessment 2021. KPSB has elected for the agriculture charge be spread
    back evenly over the year of assessments for which the allowances were given.

    Q2
    Blue Sea Bhd., is a Malaysian resident company involving in shipping industry. The company
    reported its income for the basis year 2021 as follows:
    RM
    Business income:
    Adjusted income 3,000,000
    Unabsorbed capital allowance 95,000
    Balancing charges 81,200
    Unabsorbed losses 28,800

    Dividend income:
    Dividend (single tier) from listed company 7,200,000
    Dividend – Bangladesh (only RM102,000) 185,000
    remitted)

    1
    Interest income:
    Africa (remitted) 101,700
    Malaysia – saving account at Afan Bank 80,000

    Additional information:
    Dividend (RM) Interest (RM)
    Bangladesh 70,000 -
    Africa - 35,000

    Malaysia has a double taxation agreement with Banglladesh but no such agreement with Africa.
    Required:
    Determine tax liability for Blue Sea Bhd. for the year of assessment 2021 after considering any
    reliefs available under Income Tax Act 1967.

    Q3
    Malaysia is considering introducing 5G technology and has identified certain spectrum
    bandwidth for the roll-out of 5G in Malaysia. Three (3) of the current Malaysian telcos, namely
    Shellcom, Maxim and DeeCi are interested to offer 5-G technology to their customers. The
    three (3) telcos have approached Byeden Inc (“Byeden”), the largest 5G infrastructure
    engineering company in USA for assistance in installing telecommunication towers (“towers”)
    in the Klang Valley for 5G pilot roll-out in 2023.
    Byeden has entered into separate contracts with Shellcom, Maxim and DeeCi for the
    installation of towers. Shellcom, the largest telco requires fifty (50) towers and the installation
    work is expected to last for five (5) months. Maxim and DeeCi need to install thirty (30) towers
    each and the installation works for Maxim and DeeCi each requires three (3) months to
    complete. Byeden will start the installation work for DeeCi first, followed by Shellcom and
    finally Maxim. The entire installation works will commence in February 2022 and is expected
    to be completed by December 2022.
    Byeden intends to lease a warehouse in Subang for two (2) months to store the materials,
    parts, and equipment needed for the installation works.
    The tax authorities have indicated in their Practice Note, for the “construction, an installation
    or assembly project” under section 12(4) of the Act, the meaning of a “place of business” is
    established in Malaysia if it exceeds a period of five (5) months in a calendar year.

    Required:

    2
    Byeden has appointed you as their tax consultant and seek your tax opinion on whether
    it has a place of business in Malaysia based on the proposed works it will intend to
    perform in Malaysia. Please explain your basis on how you have arrived at your
    conclusion in your tax opinion to Byeden.

    Note: There is no DTA between USA and Malaysia.

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