CONFIDENTIAL AC/JUN 2023/TAX267/TEST

UNIVERSITI TEKNOLOGI MARA

TEST

COURSE : TAXATION 1
COURSE CODE : TAX267
EXAMINATION : 17 JUNE 2023
TIME : 1 HOUR 30 MINUTES

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of three (3) questions.

2. Answer ALL questions in the Answer Booklet. Start each answer on a new page.

3. Do not bring any material into the examination room unless permission is given by the invigilator.

4. Please check to make sure that this examination pack consists of:

i) the Question Paper

ii) a four-page Appendix 1
iii) an Answer Booklet – provided by the Faculty

5. Answer ALL questions in English.

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 CONFIDENTIAL AC/JUN 2023/TAX267/TEST

QUESTION 1
Mr Shin, a Korean citizen first arrived in Malaysia to commence employment with Simfoni Sdn
Bhd on 1 August 2017. He completed his term of employment and left Malaysia permanently
on 30 April 2023. Details of his stays in Malaysia are as follows:

Year Periods of stay

2017 1 August 2017 - 31 December 2017
2018 1 January 2018 – 20 May 2018
2 June 2018 – 31 December 2018
2019 1 May 2019 – 31 August 2019
2020 13 January 2020 – 15 April 2020
2022 1 January 2022 – 30 September 2022
Notes:
1. Mr Shin went to Ireland on 21 May 2018 until 1 June 2018 for a holiday with his family.
2. Mr Shin went to Italy on 1 January 2019 until 30 April 2019 to attend a course related to
his employment sponsored by his company.
3. Mr Shin went back to Korea to take care of his daughter who was suffering from cancer
for the whole year 2021.
Required:
a. Determine the tax residence status of Mr Shin for the relevant years of assessment 2017
until year of assessment 2022. Provide the relevant sections and reasons to support your
answers.
(12 marks)

b. Aiman is a Malaysian ambassador of Ministry of Finance to the Germany had the following
periods of stay in Malaysia/Germany:

Periods of stay in Malaysia/Germany Number of days

1 January 2020 – 31 December 2020 (Germany) 365
1 January 2021 – 31 March 2021 (Malaysia) 90
1 March 2022 - 31 December 2022 (Germany) 306

Explain briefly Aiman’s tax residence status for the year of assessment 2020 and 2022.
(3 marks)
(Total: 15 marks)

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 CONFIDENTIAL AC/JUN 2023/TAX267/TEST

QUESTION 2
A. Eminent Sdn Bhd (ESB) closes its account on 31 December each year. The company
manufactures various types of children's apparels including dresses, shorts, tops, and
sweaters since 2020. ESB acquired the following additional assets:

1. On 1 March 2021, ESB purchased two (2) fabric cutting machines valued at RM 15,000
each.

2. A second-hand Toyota Vios (which cost RM50,000 and was purchased in cash on 1
July 2020) was traded in with a new Toyota Altis on 1 May 2022. Both vehicles were
purchased for use by the marketing manager. The details of the Toyota Altis are as
follows:

Cost of Toyota Altis : RM156,000

Trade-in value of the Toyota Vios : RM35,000
Cash deposit : RM30,000
Installment payment : RM3,750 for 26 months
First installment : 1 May 2022

3. ESB constructed a new building consisting of a factory and an office at a cost of

RM1,050,000. The total area of the building was 275,000 sq. ft., of which the
administrative office occupied 41,250 sq. ft. The entire building was completed and
brought into use in April 2020. Due to the COVID-19 pandemic, ESB decided to
downsize. Therefore, the entire building was sold to Sulam Sdn Bhd in July 2022 for
RM1,200,000.

Required:

Compute the capital allowance, industrial building allowance, balancing allowance or

balancing charge (if any) for each asset of Eminent Sdn Bhd for all relevant years of
assessment up to year of assessment 2022.
(17 marks)

B. King Fruit Plantation Sdn Bhd was established in January 2019 and is engaged in planting
durian trees in Segamat, Johor. The company plants a variety of durian trees such as
D101, Musang King and Black Thorn. The company prepares its financial statements as
of 30 September each year. Details of the investments made are shown below:

Date Expenditure RM
20.02.2019 Clearing of land 80,000
01.04.2019 Planting of durian trees 40,500
10.08.2019 Purchase of a tractor 120,000
05.01.2020 Construction of drains 25,000
15.02.2020 Construction of labour quarters for the plantation workers 36,000
01.09.2020 Construction of store room 15,000

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 CONFIDENTIAL AC/JUN 2023/TAX267/TEST

On 28 February 2021, King Fruit Plantation Sdn Bhd sold the entire plantation to Mas Hitam
Sdn Bhd at an agreed price of RM800,000. The accounting year of Mas Hitam Sdn Bhd
ends on 31 January of each year.

Required:

Calculate the agriculture allowances/(charges) for both companies for the relevant years of
assessment up to the year of assessment 2022. Assuming that King Fruit Plantation Sdn Bhd
made an election to spread back the agriculture charges. Round off your answers to the
nearest RM.
(8 marks)
(Total: 25 marks)

QUESTION 3

Natasha, Arif and Kumari formed a partnership known as “DigitalCom Advertising” that
provides digital and content marketing thru social networks such as Instagram and Facebook
to variety types of clients since 2019. Due to personal problem, Arif ceased to be a partner on
31 August 2022. Fahmi joined the partnership on 1 September 2022. For the year ended 31
December 2022, the partnership reported a provisional adjusted loss of RM45,300.
The terms of the partnership arrangement are as follow:
Natasha Arif Kumari Fahmi
RM RM RM RM
Capital contribution:
 Up to 31 August 2022 50,000 50,000 20,000 -
 Starting 1 September 2022 50,000 - 80,000 40,000
Profit sharing ratio
 Up to 31 August 2022 40% 40% 20% -
 Starting 1 September 2022 2/6 - 3/6 1/6
Salary per month 4,500 4,500 4,500 2,500
Interest on capital 3% per annum
Travelling allowance per month 100 - - -
Meal allowance per month - - - 200
House renovation - - 15,000 -

Other information:
1. During the year, Natasha received a dividend amounting to RM10,000 from a local
company. Meanwhile, Fahmi earned RM1,500 per month rental.
2. Fahmi made a personal contribution to Majlis Kanser Negara (approved organisation)
amounted to RM5,000.

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3. Kumari brought his own Honda BRV into the business. The cost and market value of the
car were RM120,000 and RM110,000 respectively.
4. Capital allowance and balancing charge were RM26,000 and RM12,000 respectively.
Required:
a. Compute the divisible income of the partnership for the year of assessment 2022. Round
off your answers to the nearest RM.
(4 marks)

b. Compute the total income for Natasha, Arif, Kumari and Fahmi for the year of assessment
2022. Round off your answers to the nearest RM.
(6 marks)
(Total: 10 marks)
(TOTAL: 50 MARKS)

END OF QUESTION PAPER

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CONFIDENTIAL APPENDIX 1 (1) AC/JUN 2023/TAX267/TEST

 The following tax rates are to be used in answering the questions

a) Resident individuals

Chargeable Income (RM) Rate Cumulative Tax (RM)

0 - 2,500 0% 0
2,501 - 5,000 0% 0
5,001 - 10,000 1% 50
10,001 - 20,000 1% 150
20,001 - 35,000 3% 600
35,001 - 50,000 8% 1,800
50,001 - 70,000 13% 4,400
70,001 - 100,000 21% 10,700
100,001 - 250,000 24% 46,700
250,001 - 400,000 24.5% 83,450
400,001 - 600,000 25% 133,450
600,001 - 1,000,000 26% 237,450
1,000,001 - 2,000,000 28% 517,450
Above 2,000,000 30%

b) Non-resident individuals 30%

 Benefits-in-kind (BIK) scale rates as per Inland Revenue Board (IRB) guidelines

Cost of car Prescribed annual value Prescribed annual

(when new) of private usage of car value of private petrol
RM RM RM
Up to 50,000 1,200 600
50,001 - 75,000 2,400 900
75,001 - 100,000 3,600 1,200
100,001 - 150,000 5,000 1,500
150,001 - 200,000 7,000 1,800
200,001 - 250,000 9,000 2,100
250,001 - 350,000 15,000 2,400
350,001 - 500,000 21,250 2,700
500,001 and above 25,000 3,000

The value of the car benefit equivalent to half of the above rates is taken if the car
provided is more than five years old.

Where a driver is provided, the value benefit is fixed at RM600 per month.

 Hak Cipta Universiti Teknologi MARA

CONFIDENTIAL APPENDIX 1 (2) AC/JUN 2023/TAX267/TEST

 Household furnishing, apparatus and appliances

Types of BIK Annual value of BIK

RM
Semi-furnished with furniture in lounge,
dining room or bedroom 840

Plus one or more of the following:

Air-conditioners, curtains, carpets 1,680

Plus one or more of the following:

Kitchen equipment, crockery, utensils,
appliances
i.e fully furnished 3,360

 Rates of capital allowances

Motor Heavy Plant General Computers Others Building

Vehicles & Machinery Plant & & Software
Machinery
Initial
allowance 20% 20% 20% 20% 20% 10%
Annual
allowance 20% 20% 14% 20% 10% 3%

 Hak Cipta Universiti Teknologi MARA

CONFIDENTIAL APPENDIX 1 (3) AC/JUN 2023/TAX267/TEST

 Personal reliefs

RM
Self 9,000
Disabled self, additional 6,000
Medical expenses expended on parents (maximum) 8,000
Medical expenses expended on self, spouse or child with serious (maximum) 8,000
disease including well-being relief of RM1,000
Basic supporting equipment for disabled self, spouse, child or parent (maximum) 6,000
Study course fees for skills or qualifications (up to RM2,000 for
upskilling or self enhancement course) (maximum) 7,000
Lifestyle (maximum) 2,500
Lifestyle, additional (purchase of personal computer/ smartphone/
tablet) (additional) (maximum) 2,500
Healthy lifestyle (sport equipment, entrance fee to sport activity, etc.) (maximum) 500
Spouse relief 4,000
Disabled spouse, additional 5,000
Child - basic rate (each) 2,000
Child - higher rate (each) 8,000
Disabled child (each) 6,000
Disabled child, additional (each) 8,000
Childcare fees (below six years old) (maximum) 3,000
Breastfeeding equipment (maximum) 1,000
Life insurance premium (maximum) 3,000
Contribution to approved provident fund (maximum) 4,000
Contribution relating to widow, widower or orphan’s pension or under
any approved scheme (maximum) 4,000
Life insurance (Pensionable public servant) (maximum) 7,000
Private retirement scheme contribution, deferred annuity premium (maximum) 3,000
Medical and/or education insurance premium for self, spouse or child (maximum) 3,000
Deposit for a child into the Skim Simpanan Pendidikan Nasional
(SSPN) (maximum) 8,000
Contribution to the Social Security Organisation (SOCSO) and EIS
contribution (maximum) 350
Domestic travelling expenses (local tour package, accommodation &
entrance fee) (maximum) 1,000
Electric vehicle charging facility (maximum) 2,500

 Hak Cipta Universiti Teknologi MARA

CONFIDENTIAL APPENDIX 1 (4) AC/JAN 2023/TAX267/TEST

 Rebates

Chargeable income not exceeding RM35,000 RM

* Individual – basic rate 400
* Additional rebate when wife/husband relief is claimed 400
Departure levy for umrah travel / religious travel for other religions

Flight class Destination/rate

ASEAN Others
RM RM
Economy 8 20
Business/First 50 150

Zakat/Fitrah Amount incurred