UNIVERSITI SAINS ISLAM MALAYSIA

SEMESTER 2022/2023 (A221)

PRINCIPLES OF MALAYSIAN TAXATION (MAE2023)

CHAPTER 2 : RESIDENT STATUS

QUESTION 1
Indra Putra, a Malaysian citizen was operating a restaurant in Japan since 1998. During the
period 1998 to 2014, Indra Putra was never in Malaysia. Since 2015, Indra Putra have been
returning to Malaysia frequently to attend to some family affairs and it was established that Indra
Putra was a Malaysian tax resident for the basis years 2015 to 2017.

In 2022, Indra Putra sold his restaurant in Japan. He was recruited into the Malaysian Civil
Service at the Ministry of Foreign Affairs from 01 November 2021. He was posted to the
Malaysian Embassy in Tokyo from 01 December 2021.

Indra Putra left for Tokyo on 29 November 2021 and reported for duty on 01 December 2021.
Since then Indra Putra has never been back to Malaysia.

Below are the patterns of Indra Putra’s duration of stay in Malaysia since 2010:
01 March 2018 to 31 March 2018
01 May 2019 to 31 January 2020
01 April 2021 to 15 May 2021
01 October 2021 to 28 November 2021
During the period Indra Putra was not in Malaysia, he was in Japan.

Required
For the purposes of Malaysian income tax, determine Indra Putra’s residence status for the basis
years 2018 to 2022.

Support your answers with reasons and citing the relevant provision of the Income Tax Act 1967
that is applicable for a particular year of assessment and also explain why certain sub-sections of
section 7(1) are not applicable for any particular year of assessment.
QUESTION 2
Prof. Sarah is a Pakistani national, and an expert in pomegranate cultivation. She was invited to
Malaysia in 2005 to assist with the pomegranate cultivation and nourishing programs under the
Ministry of Agriculture. She was in Malaysia until December 2018.

Prof. Sarah went to China on 20 December 2019 to assist with the setting up of a pomegranate
cultivation and research station there.

She returned to Malaysia on 15 November 2020 and continued to work with the Ministry of
Agriculture. She took a vacation leave from 1 December 2020 to 14 December 2020 and went on
a sight-seeing tour in Thailand.

On 15 July 2021 she was sent to Bangladesh to assist with the pomegranate cultivation recovery
program there. Upon completion of the Bangladesh assignment, she returned to Malaysia on 1
August 2022.

On 1 September 2022 she received an attractive offer from the Australian government to
establish goat farming in Australia. Prof. Sarah accepted the offer and migrated to Australia on
28 October 2022.

Note: Prof. Sarah job assignments in China and Bangladesh were totally not connected with her
job assignment with Ministry of Agriculture in Malaysia.

Required:
With reference to the ITA determine the resident status of Prof. Sarah for the years of assessment
2018 to 2022 explaining briefly the application of the relevant provisions of the law.

QUESTION 3
Aditya, an Indonesian national arrived in Malaysia for the first time on 2 April 2022 to take up a
short term employment in Negeri Sembilan from 5 April 2022 to 31 May 2022, earning
RM60,000. Aditya left Malaysia on 03 June 2022 but returned to Malaysia on 10 August 2022.
He is considering whether to leave Malaysia either on 1 December 2022 or 15 December 2022.

Required
Advise Aditya on the income tax implications:
(i) if he leaves Malaysia on 10 December 2022 or
(ii) if he leaves Malaysia on 15 December 2022.

Support your advice with relevant provisions of the Income Tax Act 1967.