CONFIDENTIAL AC/ OCT 2019/TAX267

UNIVERSITI TEKNOLOGI MARA

SUGGESTED ANSWER COMMON TEST

COURSE : TAXATION 1
COURSE CODE : TAX267
EXAMINATION : OCTOBER 2019
TIME : 1 HOUR AND 30 MINUTES
 CONFIDENTIAL AC/ OCT 2019/TAX267

SOLUTION 1
A. Personal gift √
Gambling √
Sale of capital assets √
Other relevance answer (3 √ x 1 mark = 3 marks)

B. Individual taxpayer – calendar year √

Company – Calendar year or non-calendar year √
(2 √ x 1 mark = 2 marks)
(Total: 5 marks)
SOLUTION 2
a.
YA Period of stay No of Resident Section Reason
days status
2014 15/12 - 28/12 14 Non-
Resident
2015 5/1 -7/6 154 Resident 7(1)(a)  Stayed in Malaysia for at
1/7 - 31/12 184 least 182 days√
338

2016 1/1 - 2/5 123 Resident 7(1)(b)  Stayed in Malaysia less

3/5 - 11/5 (9) TA than 182 days √ and the
12/5 - 2/7 52 period is linked by √ YA
175 2015 with at least 182
consecutive days √

2017 4/3 – 23/9 204 Resident 7(1)(a)  Stayed in Malaysia for at

least 182 days √

2018 15/1 - 2/2 19 Resident 7(1)(d)  Resident in 3 immediate

preceding years √ (YA
2017,2016,2015) √ and
also resident in following
YA 2019√
2019 2/4 - 3/7 93 Resident 7(1)(c)  Stayed at least 90 days
in Malaysia √ and
resident√ in three out of
four immediate
preceding years (YA
2018,2017,2016) √

(24  x 1/2 mark = 12 marks)

b. 3 disadvantages of being a resident individual:
i. Income tax is charged at a flat rate of 28% √
ii. Not entitled to enjoy individual tax relief √
ii. Not entitled to enjoy individual tax rebate √
(3  x 1 = 3 marks)
(Total: 15 marks)
 CONFIDENTIAL AC/ OCT 2019/TAX267

SOLUTION 3
Salamah
Computation of Statutory Employment Income for YA 2019
s 13(1)(a) RM
Salary (6,635 + 610 + 2,100)x 100/89 x 7 73,500 √√√
Gratuity [130,000 – (1,000 x 19)] 111,000 √√
Bonus (10,500 x 2.5) 26,250 √√
Entertainment allowance (1,000 x 7) 7,000 √
Credit card : business purposes (not taxable) Nil √
: annual membership fees 200 √
Parking allowance (exempted) Nil √
Share option (8.70 – 4.50) x 5,000 21,000 √√√
238,950
s 13(1)(b)
Car benefit (5,000 x 6/12) 2,500 √√
Telephone bills (exempted) Nil √
Dental treatment (exempted) Nil √
Membership recreation club (250 x 7) 1,750 √
Furniture benefit (3,360 x 7/12) 1,960 √√
Maid (400 x 7) 2,800 √√
Leave passage - Australia - Air ticket (4,200 – 3,000) 1,200 √√
Hotel bills 1,500 √
Food bills 800 √
12,510
s 13(1)(c)
House:(2,000 – 800) √ x 7 √ = 8,400
Or
30% (s 13(1)(a) - share option)
30% (238,950 – 21,000) √ = 65,385 √ OF
Therefore, TLO =8,400 x7/7 =8,400 8,400 √

s 13(1)(d)
Unapproved fund – employer’s contribution (55% x 250,000) 137,500 √√

GROSS EMPLOYMENT INCOME √ 397,360

(-) Allowable expenses:

Rental (500 x 7) (3,500) √√
Entertainment expenses (restricted to) (7,000) √
STATUTORY EMPLOYMENT INCOME √ 386,860

1√ provided for correct in all sections applied i.e. s 13(1)(a) – s 13(1)(d)

(40 √ X 1/2 mark = 20 marks)

END OF SUGGESTED SOLUTION