CONFIDENTIAL 1 AC/MAY 2018/TAX267

UNIVERSITI TEKNOLOGI MARA

COMMON TEST 1

COURSE : TAXATION 1
COURSE CODE : TAX267
EXAMINATION : MAY 2018
TIME : 1 HOUR AND 30 MINUTES

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INSTRUCTIONS TO CANDIDATES

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1.
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This question paper consists of three (3) questions:
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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
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invigilator.
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4. Please check to make sure that this examination pack consists of:
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i) the Question Paper

ii) a one-page Appendix 1
iii) an Answer Booklet – provided by the Faculty
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5. Answer ALL questions in English.

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DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 4 printed pages

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 CONFIDENTIAL 2 AC/MAY 2018/TAX267

QUESTION 1

a. State any TWO (2) classes of income upon which tax is chargeable under Section 4
of Income Tax Act 1967.
(2 marks)

b. Briefly explain the TWO (2) conditions for an individual to be liable on personal
income tax under Section 3 of the Income Tax Act 1967.
(3 marks)

(Total: 5 marks)

QUESTION 2

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Mr. Konrad, an engineer from Frankfurt Germany was employed by Neo Sdn. Bhd. to build

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fiber-optic communications along the PanBorneo Highway in Sarawak. The following relates

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to his patterns of stay in Malaysia since his arrival.

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Year Periods of stay Note

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2012 8/5/2012 – 30/11/2012
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2013 4/7/2013 – 28/11/2013
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3/12/2013 – 28/12/2013 1
2014 6/1/2014 – 31/8/2014
2015 15/4/2015 – 31/8/2015 2
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2016 4/3/2016 – 12/4/2016

1/3/2017 – 31/5/2017
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2017
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Note 1: He flew back to Germany from 29 December 2013 to 5 January 2014 to

celebrate Christmas and New Year’s holiday with his family.
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Note 2: Neo Sdn. Bhd. sent Mr. Konrad to attend an exhibition on fiber-optic
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communications in Melbourne Australia, from 1 September to 5 September

2015.
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Required:

a. Determine the tax residence status of Mr. Konrad for the relevant years of
assessment 2012 until year of assessment 2017. Provide the relevant sections and
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reasons to support your answer.

(12 marks)

b. Briefly explain the THREE (3) types of temporary absence that allowed to facilitate
the application of Section 7(1)(b).
(3 marks)
(Total: 15 marks)

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 CONFIDENTIAL 3 AC/MAY 2018/TAX267

QUESTION 3

Encik Hadi, aged 48 in 2017, worked as a general manager of Lestari Sdn Bhd (LSB) since
1 September 2004. Encik Hadi’s service was terminated on 30 June 2017 due to LSB’s
restructuring exercise. The remuneration and benefits received from LSB in 2017 were
provided below.

i) He received a monthly salary of RM9,580 after EPF deduction of 11%, schedular tax
deduction (STD) of RM700 and loan of RM400.

ii) On 1 January 2017, he was offered a share option for 30,000 units of shares at
RM1.00 per unit, with the market value of RM1.80 per unit. He exercised his option
on 1 March 2017 when the market value of the share was RM1.50 per unit.

iii) On April 2017, he received a bonus of RM15,000.

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iv) His child’s school fees from January 2017 until June 2017 of RM10,400 was borne by

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LSB.

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v) He was provided with an unfurnished bungalow (defined value of RM20,000 per

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annum) since 2015 until 30 June 2017. He paid rental payment of RM450 per month
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to LSB.
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vi) He was paid a compensation for loss of employment amounted to RM135,000.
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On 1 October 2017, Encik Hadi was appointed as a Director (holding 31% ordinary share
capital) in Aman Sentosa Bhd (ASB). The following remuneration and benefits were provided
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by ASB for the year 2017.

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i) A monthly director’s fee (gross) and travelling allowance of RM17,000 and RM3,000,
respectively.
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ii) A brand-new car (with a driver) costing RM200,000 was provided on 1 October 2017.
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The driver was paid RM1,000 by ASB.

iii) A ‘four-days trip’ to Cyprus with his wife. The expenses paid by ASB included airfare
of RM7,000, hotel bills RM6,000 and food bills RM3,800.
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iv) Corporate membership fees consisting of entrance and subscription fees, totaling
RM3,500 and RM6,000, respectively. The fees were paid by ASB.

v) ASB reimbursed a total amount of RM4,000 to Encik Hadi for his child’s tuition fee.
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vi) A hotel accommodation was provided for the month of October 2017. The total bill
paid by ASB amounted to RM9,300. However, he only utilized two-third (2/3) of the
accommodation. He moved into a fully furnished bungalow (defined value was
RM3,800 per annum, inclusive RM800 cost of furniture), commencing from 1
November 2017.

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 CONFIDENTIAL 4 AC/MAY 2018/TAX267

vii) Encik Hadi hired a maid on 1 December 2017 and paid a monthly salary of RM800.
The amount was reimbursed by ASB.

Required:

Compute the statutory employment income of Encik Hadi for the year of assessment 2017.

(Total: 20 marks)

END OF QUESTION PAPER

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 CONFIDENTIAL APPENDIX 1 (1) AC/APR 2018/TAX267

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

Cost of car when new Annual value of BIK

RM RM
Up to 50,000 1,200
50,001 - 75,000 2,400
75,001 - 100,000 3,600
100,001 - 150,000 5,000
150,001 - 200,000 7,000
200,001 - 250,000 9,000
250,001 - 350,000 15,000
350,001 - 500,000 21,250
500,001 and above 25,000

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The value of the car benefit equivalent to half of the above rates is taken if the car

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provided is more than five years old.

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Where a driver is provided, the value benefit is fixed at RM600 per month.
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 Household furnishing, apparatus and appliances

Types of BIK Annual value of BIK

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RM
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Semi-furnished with furniture in lounge,

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dining room or bedroom 840

Plus one or more of the following:

Air-conditioners, curtains, carpets 1,680
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Plus one or more of the following:

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