UKAT3033 / UBAT3033 Taxation ll

UNIVERSITI TUNKU ABDUL RAHMAN

FACULTY OF ACCOUNTANCY AND MANAGEMENT / FACULTY OF

BUSINESS AND FINANCE
ACADEMIC YEAR 2019/2020
BACHELOR OF COMMERCE (HONS) ACCOUNTING /
BACHELOR OF ACCOUNTING (HONS)
MAY 2019

TUTORIAL 4 - Suggested Solutions

2.

Munchy Cookies Sdn Bhd.

Tax computation for year of assessment 2020
RM RM RM
+ -
Net profit before tax 200,080
Adjustments:
Increase in prov for stock
2,300
obsolescenceN1 (7600 -9300) not
allow, add back
Dividend N2
- Single tier dividend (already 3,400
deducted at source)
- dividend from approved unit
3,000
Trust (exempted)
Gain on disposal of quoted
27,500
shares (capital gain) N3
Rental income N4 Non biz source, 48,000
no maintenance provided
Annual subscription for trade
Nil
Association (Allowable)
Foreign exchange loss (capital) N5 2,600
Entertainment of customers
3,200
(50% of 6400) N7
New year party for employees Nil
(allow)
Hampers for customers (50% x 1,500
3000)
Entertainment allowance of
6,000
Directors (50% x 12000)
1
UKAT3033 / UBAT3033 Taxation ll

Marketing and promotion-

Nil
samples to children N6
Advertising in Malaysian N6
33,000
Newspapers
Interest expense N8
- Bank overdraft interest Nil
- Interest paid on loan Nil

Consultancy fee to non-resident (add N9 30,000

back, not deductible)
Supporting equipment- disabled Nil
Quit rent and assessment of shop
1,320
Lot (Addback, rental is not biz
source not allow)
- Cash donation to a political N15
1,000
Party( not allow, to government can)

2
- Cash donation to approved
2,000
Organization (after agg income)
Travelling expenses-directors (not N10 14,000
allow)
Sales representatives- travel N2
10,700
Costs (double deduction)
Bad and doubtful debts N11 (not 14,500
allow)
Repairs and maintenance
4,360
(2400+1960) N12 (not biz expen)
Improved roof – capital 10,000
Legal and professional fees N13
- Audit fees Nil
-Tax appeal fees (not allow) 14,000
Staff cost- disabled employee’s
18,000
salary N14 (double deduction)
Maintenance of child care centre 48,000
(Double deduction)
Depreciation (Not allow) 13,900
120,680 (191,600) (70,920)
Adjusted income 129,160
Less Capital allowance N16 (24,000)
Statutory income 105,160
Add Other income
Rental income N4 48,000
Less assessment and quit rent N9(c) 1,320
Repairs N12 2,400
Air conditioner (not allow, capital Nil (3,720) 44,280
exp)
Add: Dividend income N2
Single tier Nil
Unit trust Nil Nil
Gain on disposal of quoted Nil

Aggregate income 149,440

Less: approved donation N15(b)

- cash donation to approved organization (2,000)
Chargeable income 147,440
Income tax payable at 24% 35,385.60
3.

a) GRL losses allow the transfer of losses between members of the group provided
the conditions are satisfied.

b) Group relief losses apply for not more than 70% of the adjusted loss in the basis
period (current year loss) of the surrendering company is allowed to be
transferred to the claimant company. Where a surrendering company wishes to
transfer its loss, the adjusted loss must be set-off against available defined
aggregate income of the claimant company

c) To not qualify for GR, both the transferor and the claimant of the loss items
have to:
i) not Malaysian-incorporated and resident companies;
ii) does not belong to the same group of companies ie not maintaining 70%
shareholding threshold; and
iii) does not have the same accounting year-end.

d) GRL apply for the YA 2019 but does not apply for the YA2016, 2017 & 2018
as the companies are not related (70%) throughout the basis period for the YA
2016, 2017 & 2018.

Note: This is due to they must be related companies throughout the basis period
for that year of assessment and the twelve (12) months period immediately
preceding that basis period.

e)
(i)
 incorporated in Malaysia;
 resident in Malaysia in the basis year for that year of assessment;
 related companies throughout the basis period for that year of assessment and
the twelve (12) months period immediately preceding that basis period;
 have a paid-up capital in respect of ordinary shares of more than RM2.5
million at the beginning of the basis period for that year of assessment;
 have a twelve (12) month basis period ending on the same date;
 make an irrevocable election to surrender or claim an amount of adjusted loss
in the return form furnished for that year of assessment under section 77A of
the ITA; and
 subject to tax at the appropriate rate as specified in paragraph 2 of Part 1 of
Schedule 1 of the ITA.
 UKAT3033 / UBAT3033 Taxation ll

(ii)
Jen Lucky
(RM’000) (RM’000)
Statutory Income: Business (profit/ (loss)) - -
Statutory Income: Investment 3,600 800
(utilize
biz loss
2400)
Aggregate income 3,600 800
Less: Current year loss (800)
Approved Donations (10%) (300) Nil
Defined Aggregate Income 3,300
Less: GR Losses (70% of 1600) (1,120)
Chargeable Income 2,180 Nil
Loss c/f (2400-1120-800) 480

3 Jayasuria Sdn Bhd

Year of Assessment
202001.01.2020 –
31.12.2020
(+) (-)
RM’000 RM’000 RM’000
Net Profit Before Tax 903
36
Gross income from goods withdrawn from stock
(Consider as sales) N1
Rental income N2(i) (Non biz source) 340
Interest Income N2(ii) (non biz source) 43

Remuneration to disabled staff N3(i) (DD) 33

EPF : Staff N3(i) NIL
EPF : Director (25% - 19% X 1,800,000 N3(ii)) 108
(can[t exceed 19%)
Lease termination (not allow, penalty) 25
Bad trade debts recovered N5(i) (windfall NIL
gain)
General provision brought forward N5 205
Bad trade written off N5(iii) NIL
General provision CARRIED forward N5(ii) 240
Entertainment of overseas customers (50%) N6(i) 9
Reimbursement of drivers salary and EPF N6(ii) Nil
Overseas company trip N6(iii) (not allow) 267
Forex loss : unrealized (RM130- RM70) N7 60
Gifts without logo (50% X RM108,000) N8 54
Statutory Audit fees N9(i) NIL
Tax fees N9(ii) (not allow) 44
5
UKAT3033 / UBAT3033 Taxation ll

Depreciation N9(iii) (not allow) 872

Quit rent & assessment N9(iv) (not allow) 39

Donation N10 (after agg income) 116

Maintenance of P&M N11 (Capex) 17
Other business expenses N12 Nil
1,887 (621) 1,266
Adjusted income 2,169

Less : Capital allowance (RM822 +68+20) W1 (910)

Statutory business income 1,259

Add : Non business Income

Rental income N2(i) 340
Quit rent and assessment N9(iv) (39)
301
Interest income N2(ii) 43
Aggregate income 1,603

Deduct donation :
Cash donation (not approved) N10 Nil
Total / Chargeable income 1603

Working 1 :

Capital allowance computation :

Machine
QE (RM183,000 +17,000) 200,000
IA (20% ) 40,000
AA (14%) 28,000 (68,000)
132,000

Working 1 :

Capital allowance computation : If the car value >

150K, maximum for CA you can claim is 50,000.
If the car value is < 150K = max you can claim CA
– 100,000

Motor car 50,000

QE
IA (20% ) 10,000
AA (20%) 10,0000 (20,000)
30,000