ACCA TAX PAST YEAR QUESTION

SECTION B QUESTION 2 -RPGT

December 2022
(a) The gift of house by Gu
QUESTION 1-Sales & Service Tax the donor , Guna is a Malay
Invoice Items RM Sales Tax Reason will not subject to real prop
Date (10%）
The acquisition price of the
1/5/2022 Sales of air-filtration 100,000 10000 Taxable goods incurred. It will be RM 600
equipment to Zahara
in Ipoh, Malaysia
The acquisitions date of ass
1/30/2022 Sales of goods to 30000 3000 Taxable Goods disposer.
Malim SDN BHD by Guna on 7 May 2018.

2/10/2022 Sales of air-filtrations2,000,000 0 Exported services is not subject (b) Real Propert Gain Tax
equipment shipped to sales tax as the subject
to Jeju Ltd, Korea. matters is outside Malaysia. Disposal Price
Consideration received
(-)Permitted Expenses

2/16/2022 Invoice for sales 220000 0 ASB is not required to impose (-)Incidental Costs
of compressor to sales tax on the sales of the Disposal Price
TT SDN BHD compressors to TT SDN BHD
as it obtained the approval from (-)Acquisition Price
the Director General . Consideration paid
(+)Incidental Costs

(-)Recoveries
The taxable period would be 1 JAN 2020 to 28 FEB 2022.
The due date of the payment of sales tax would be the end of the following month Chargeable Gain
(ie 31 March 2022)
(-)Schedule 4 exemptions
The effective date of registration of sales tax would be 1 April 2022. RM10,000
OR 10% OF Chargeable Ga
WHICHEVER IS HIGHE

(-)Allowable loss from othe

(b)(i） The training services would subject to service tax if it exceeded the amount
of threshold of RM 500,000. Then , the company would need to registered for Gain subject to RPGT
service tax anad charged service tax.
However, based on the monthly billings of RM 40000, DSB is not liable to register RPGT Payables
for service tax, as the amount of RM 48000 (doesn’t exceed the amount of
RM 500,000) Acquisition date
Disposal Date
（ii） The research and development (R&D) services provided by contract R&D company RPGT RATE (%)
are specifically excluded from list of taxable services, not subject to service tax.

QUESTION 3-Relief of capital allowances QUESTION 4-Badges Of

(a) The building contructed by Driving Academy (DA) which carried out it training (a) Badges of trade would b
activity will not be treated as plant & machinery as it the building used to carry on the revenue in nature.
ordinary course of the business.
The gain of disposal of land
It doesn’t constitude as a plant & machinery and not eligible to claim the capital disposal of land would be 2
allowances.
The longer the length of the
it is a capital transactions.A
Glove SDN BHD In this scenario, the land wa
Factory Building RM RM of ownwership. The disposa
Land 0
Stamp duty on land acquired 0 The purpose or the intention
Demolition of an existing car showroom buiding on the land 410000 nature. In this case, KX SD
Cost of constructions of the factory building 6,300,000 rental income from the land
Cost of the constructions of the warehouse within the company 360000
The frequency of the transa
Qualifying Plant Expenditure 7070000 nature. However, the one of
In this scenario, this is the f
(-)Initial Allowances (10%) 707000 Thus, it is a one off transact
(-) Annual Allowances (3%) 212100

Machine Suggested Answer

Machine from Korea 97000 The gain of RM 20 mil arris
(-)Foreign exchange gain of the machine -3000 income tax ifn it arises from

Qualifying Plant Expenditure 94000 When there is any modifica

where the character has cha
(-)Initial Allowances (20%) 18800 a trade and would subject to
(-)Annual Allowances (14%) 13160 to income tax.
In conclusion, all the factor
of capital nature and would
Refrigerator （small value assets)
Refrigerator 2000
S4(A)(ii) Special Class Of
(-)Capital allowance ( able to claim 100%) -2000 (B) The one week training c
0 The training services is perf

Therefore, the payment of R

not performed in Malalysia
(II)The payment of the softw
and would be subjected to w
of payment fall under the ta
QUESTION 2 -RPGT 8/10 marks

(a) The gift of house by Guna to Jasvinder will be trated as a no gain no loss transactions since
the donor , Guna is a Malaysia Citizens. Hence, the house receive by Jasvinder as a gift
will not subject to real property gain tax (RPGT).

The acquisition price of the house would be consideration paid by Guna and the incidental cost
incurred. It will be RM 600000+RM 12000+RM 18000=RM 630,000

The acquisitions date of assets must be coincide with the date of disposal of assets by the
The acquisition date of the Jasvinder's house will be the date of transfer of the house
by Guna on 7 May 2018.

(b) Real Propert Gain Tax Payables by Jasvinder

RM RM
Disposal Price
Consideration received 2,100,000 0.5
(-)Permitted Expenses Enhancement cost 180000 0.5

(-)Incidental Costs Broker Fees 31000 -211000 0.5

Disposal Price 1,889,000

(-)Acquisition Price
Consideration paid 600000 0.5
(+)Incidental Costs Stamp duty & Legal Fees (18k+12k) 30000 1
Legal fees-bank financing 0 1
(-)Recoveries Forfeited Deposit -20000 0.5
-610000
Chargeable Gain 1,279,000

(-)Schedule 4 exemptions
10000 0.5
OR 10% OF Chargeable Gain' 127900 0.5
WHICHEVER IS HIGHER -127900

(-)Allowable loss from other property -51000

0.5
Gain subject to RPGT 1,100,100

RPGT Payables (30% *RPGT) 330030

Acquisition date 5/7/2018

Disposal Date 1/3/2022 0.5
RPGT RATE (%) 30% (NON-CITIZEN) 0.5

QUESTION 4-Badges Of Trade 5/10 Marks

(a) Badges of trade would be the factors of determine the income whether it is capital or
revenue in nature.

The gain of disposal of land by KX SDN BHD would be the capital gain. The capital gain of the
disposal of land would be 20 mil. (RM 23 MIL-RM 3 MIL) and would not subjected to income tax.

The longer the length of the ownerships periods from the acquisition of the land would indicate
it is a capital transactions.A quick sales would be revenue in nature.
In this scenario, the land was be held for 10 years and would be considered as long period
of ownwership. The disposal would be capital in nature and not subject to income tax.

The purpose or the intention would also a significant factor to consider whether it is capital or
nature. In this case, KX SDN BHD acquired the land for investmen purposes and derived
rental income from the land. Hence is a capital gain and not subject to income tax.

The frequency of the transactions; the repetitive transactions of the assets would be revenue in
nature. However, the one off transactions would be a capital transactions.
In this scenario, this is the first time of KX SDN BHD disposing off any land.
Thus, it is a one off transactions and not subject to income tax.

Suggested Answer
The gain of RM 20 mil arrising from the disposal of land by KS SDN BHD would be subject to
income tax ifn it arises from a trade in nature and regardedn as revenue.

When there is any modifications or alterations of the assets such as converting the land title
where the character has changed to make it more valueable , the more likely the gain would be
a trade and would subject to income tax. Gains arising from isolated transactions can be subject
to income tax.
In conclusion, all the factors above indicates that the disposal of land is likely to be a transactions
of capital nature and would not subject to income tax.

S4(A)(ii) Special Class Of Income

(B) The one week training course,RM 30000 would be the Special Class Of Income (10%)
The training services is performed in the premises in India. (outside Malaysia)

Therefore, the payment of RM 30000 to non-resident is not subject to witholding tax since it is
not performed in Malalysia.
(II)The payment of the software licensing agreement , RM 120,000 would be the royalty income
and would be subjected to witholding tax ( 10% * RM 120,000=RM 12000) since the responsibility
of payment fall under the tax resident, KY SDN BHD.
QUESTION 5 10 / 15 marks Question 6
(a) Modal Sdn bhd
The commencement of trading of business generally be the date of the company starts to
generate the income.It is not necessary when the businessis set up or the pre-commencemnt
activity of the business.The commencement date would be the raw materials received
and in the position of ready to manufacture, hence it would be on 1 December 2021.
(1 mark)

(B) Kudat SDN BHD Income Tax Payables for the year of assessment 2022 (9 marks)
RM RM'000 RM'000
(-) (+)
Notes NON NON
Taxable deductible
Profit Before Tax 5235
(+/-)Adjustment
Depreciations of non-current assets 1 87 0.5
Approved Research & Development 1 1 0
(double deductions)(obtain approval)

Interest Income from fixed deposit 2 102 0.5 S13(1)(a)

Unrealised Foreign Exchange gain 2 30 0.5
Irrecoverable Debts recovered (taxable) 2 0 0

Statutory Audit fees (deductible) 3 0 0.5

Secretarial fees (deductible up to 15K)(25-15） 3 10 1 S13(1)(b)
Entertainment allowances (50% deductions) 4 30 1
Donation of computers (relocation) 4 6 0.5
Renovation for disabled staff (single deduction) 5 0 1
Lease Rental of Motor vehicles (deductible up to 50 5 60 0
Hire-purchase interest (biz expenses) (deductible) 6 0 0.5
Petty cash written off (loss of cash by director) 7 14 0.5
Leave passage for director (non-deductible) 8 6 0.5

133 5448
-133
Adjusted Business Income 5315

(-)Capital allowances -1080 0.5

Statutory Business Income 4235

S4©Interest Income
Fixed deposit from a local bank (taxable) 102 0.5

Aggregate Income 4337

(-)Approved Donations
Donations in kind (computers) (non-deductible) 0 0.5

Chargeable Income 4337

Tax Payables (4337*24%) 1041

(B)
Question 6 13/15 marks
Koshy
Chargeable Income Computations for YA 2022
S4(a）Business RM RM
Loss Before Tax -33000
(+) Depreciations 12000
Adjusted Income (Current year business loss-21000) 0

（+）Balancing charge 5000

5000
(-)Capital Allowances -1000

Statutory Business Income 4000

(-)Unabsorbed business loss ( 4Kcarried forward to 2023) -4000

Net Statutory Business Income 0

S4(b) Employment
Salary (15000*12) 180000
Excellent Service award-gift of gold bar(incurred ON 2023) 0
(no exemptions--less than 10 years) 180000

Medical expenses incurred by employer (exempted) 0

Leave Passage-outside Malaysia 3840
(exempted for 3000) -3000
840

Statutory Employment Income 180840

Aggregate Income 180840

(-)Current year business loss -21000

Total Income 159840

(-）Personal Relief
Self Relief 9000
Medical Treatment for parents 1500
EPF 4000 -14500
Chargeable Income 145340

First RM 100,000 10700

Balance RM 45340 AT 24% 10881.6
Total TAX Payables 21582

Soo
Chargeable Income Tax & Income Tax Payables Computations for YA2023
S4(b) Employment RM RM
Gross Salary 81000

S4(d) Rental Income

Gross Rental 69000

(-)Deductible Expenses
Quit Rent & Assesment -10000
Adjusted Rental Income 59000
(-)Capital allowances for factory (700,000*3%) -21000

Statutory Rental Income 38000

Aggregate Income 119000

(-)Personal Relief
Self Relief -9000

Chargeable Income 110000

First RM 100,000 10700

Balance 10,000 at 24% 2400
Total Tax Payables 13100

Income Tax Treatment

The proposed excellent service reward of a gold bar which to be presented
to Koshy in February 2023, will be taxable in the year of assesment 2023.

There would be a RM 2000 exemptions on on the service reward that Koshy

received.
The taxable value for the gift of gold bar would be RM 4000.(RM 6000-RM 2000),
assessed under S13(1)(a).

Suggested Answer

The gold bar given to Koshy would be regardedas a perquisite subject to personal
income tax as it has a cash value, can be sold, assigned or converted into cash as
a reward for service excellence.
ACCA TAX PAST YEAR QUESTION
SECTION B QUESTION 2-Real Prop
December 2019 10/10 MARKS
QUESTION 1-Sales & Service Tax RM RM (A)(I) The real property ga
(a)(i) Direct Manufacturing Cost 60,000 assets by the disposer.
Indirect Manufacturing & Distributions Cost 40,000
Total cost 100,000 The real property gain tax
(+)10% of mark up 10000 if it disposal within 5 years
If the disposal of real prope
Value subject to sales tax 110,000 on it whether he acquire as
Sales tax (10%） (110,000*10%) 11000
Total Selling price of the goods 121,000 Osaka-San is an individual
RM 10000 or the 10% of C
(ii) Kulim SDN BHD
Taxable Period = 1 January 2019-28 February 2019 (1 marks) (ii) The due date of the filli
chargeable assets.
(iii) The due date for Amalan SDN BHD to pay sales tax to Royal Malaysia Custom
Departments would be the end of the following month of the taxable period. (b) RPGT Payables Comp
Wau SDN BHD
Therefore, the due date of the sales tax payables would be 31 March 2019. Disposal Price
( 2marks) Considerations Received

(B)(I) SOHO SDN BHD RM (-)Incidental costs

Fees for the design Services 10000 (-)Permitted Expenses Enh

Value subject to service tax 10000 Disposal price

Service Tax (6%)* 10,000 600 (-)Acquisition price

Considerations Paid
(+)Disbursement-statutory Cost 2000 (+)Incidental Costs

Total amount of the invoice to SOHO SDN BHD 12600

The disbursement of the planning fees incurred on behalf of Soho SDN BHD
would be be taxable. (-)Recoveries

Chargeable Gain

(ii) The taxable period of the service tax would be based on the payment basis. (no eligible to Schedule 4 e
Hence, The taxable period would be 1 March 2019-30 April 2019.
Gain subject to Chargeab
Acquisition Date
Disposal Date
 RPGT Rate (%)

QUESTION 3-Relief of Capital Allowances 9/10 MARKS QUESTION 4-Interest R

(A)(I) Requirements to Claim Capital Allowances (a)(i)
Sabah SDN BHD (SSB) is able to claim capital allowances on the machines as
it incurred capital expenditure, RM 878,000 on the machines

The specialist machines is used in the ordinary course of the business of SSB.
SSB is also the legal owner of the specialist machines and use it at the end of the(ii)
basis period.
*Carrying on a business during the basis period (2 marks)

(II) The fact that the machines was operated by Jeguh SDN BHD was not relevant as(iii)
the company was engaged by SSB to operate the machines and the assets was
used for SSB's business.Hence, The IRB does not have grounds to disallow
the claim.
(Iv) Interest Expenses allo
(B) Miri SDN BHD Basis period-1/4/18-31/3/19
Cateen & Recreational Area for employees 15% Industial Area
Office & Administrations Area 20% Non-industrial Area
R & D Building 15% Non-industrial Area

Factory （10%+3%） RM’000 RM‘000

Cost of the land 0
Legal fees & stamp duty on land 0
building approval from local authorities 20
Architect fees 100
Constructions Fees 1000
Total Cost 1120

(-)Non-industrial Portions
Office & Admin Area (20%*1120) -224
R & D Building (15%*1120) -168
-392
Qualifying Building Expenditure 728
(b)
Initial Allowances (10%*728) 73
Annual Allowances (3%* 728) 22
-95
Residual Expenditure as at 31/3/2019 633
Research & Development Building (10%+3%)
RM RM
Qualifying Building Expenditure 168

Initial Allowances (10%* 168) 17

Annual Allowances (3%* 168) 5
-22
Residual Expenditure as at 31/3/2019 146
QUESTION 2-Real Property Gain Tax (RPGT) 9/10 MARKS

(A)(I) The real property gain tax would be charged on the disposal of the the chargeable
assets by the disposer.

The real property gain tax (RPGT) rates would be lower when a property is disposed
if it disposal within 5 years of the acquisition.
If the disposal of real property is made after 5 years, the same rate of 10% will be charged
on it whether he acquire as company or individual.

Osaka-San is an individual is eligible to Schedule 4 Exemptions , which is the higher of

RM 10000 or the 10% of Chargeable income.

(ii) The due date of the filling of RPGT return would be within 60 days of the disposal of the
chargeable assets.

(b) RPGT Payables Computations

Wau SDN BHD
Disposal Price RM RM
Considerations Received 4,000,000

(-)Incidental costs Commisions Charge 40000

(-)Permitted Expenses Enhancement costs 100000
-140000
Disposal price 3,860,000

(-)Acquisition price
Considerations Paid 3,000,000
(+)Incidental Costs Stamp duty 84000
Legal Fees 40000
Professional Fees 2000
Interest of Loan (unable to deduct) 0
3,126,000
(-)Recoveries Compensations -48000
-3,078,000
Chargeable Gain 782,000

(no eligible to Schedule 4 exemptions as it is not an individual)

Gain subject to Chargeable Gains (10%) 78200

Acquisition Date 12-Jun-09
Disposal Date 19-Jul-19
RPGT Rate (%) 10% (company) (within the 6th year or more )

QUESTION 4-Interest Restrictions 5/10 MARKS

Interest Restrictions should be applicable on the interest expenses when the loan
financed used in business and investment purposes.
The investments are directly financed by the borrowings.
The interest expenses exceeded RM 10,000.

The interest restrictions would be based on the year end basis as the total cost of
investment & loan which finance by the borrowings doesn't exceed RM 500,000.

Interest Restrictions =loan financed by interest/ Total loan * Interest expenses

= RM 350,000/RM 1200,000* RM 120,000
= 35000

(Iv) Interest Expenses allocated to the investement

Investment in shares
Harimau SDN BHD= RM 100,000/RM 350,000* RM 35000
= 10000
Canada Investment Inc =RM 200K/RM 350K *RM 35000
= 20000

Investment in fixed deposit

Local bank =RM 50K/RM 350K *RM 35000
=RM 5000

Investement in Shares RM‘000

Harimau SDN BHD 100
Canada Investment Inc 200
Fixed deposit 50
Total Cost 350

Vest Co SDN BHD

A large portion of the interest expenses allocated to the dividends is lost & unable to
utlised as the dividend income received under single tier system is tax exempted.

The board of directors could consider the possibility of HSB paying dividends to VCSB
since HSB has sufficient reserve available for distributions of dividends.

VCSB would not be subject to income tax on the dividend received as it is tax
exempted under single-tier system.

The dividend received by VCSB can be used to settle the bank borrowingd , thus avoid
the need for VCSB to incur any more interest expenses.
QUESTION 5 10/15 MARKS QUESTION 6-Taxatio
No Lah SDN BHD (NL) (A)(i)
Chargeable Income Computations for the basis period for the year of assesment 2018
RM'000 RM'000
(-) (+)
Profit Before Tax 2223
(+/-) Adjustment
0.5 Amortisations & Depreciations (non-deductible) 12497 1 (II)
Import duties & Taxes （deductibles） 0 1
(1) Export credit insurance premiums (double deductions) 44 1
(1) Training Expenses for new thermal process 29 0 1 (iii)
(double deductions)
0.5 Rental Income (relocation) 114 2
Foreign Exchange Unrealised Loss on trade payables 23 3
(non-deductible)

Realised Foreign Exchange Gain from trade receivable 67 3 (B)

(taxable)
Advertising NL's brand in local medias & websites 0 4 S13(1)(a)
(double deductions is unavailable as not wholly-owned company)

Donations/ Sponserships expenses for a sports club fund 4

0.5 In kind (relocations) 205 4
0.5 In cash (relocations) 505 4 S13(1)(b)

0.5 Professional Fees for payroll management (deductible) 0 5

0.5 Professional Fees for tax audit defence (non-deductible) 12 5
0.5 Expenses incurred on proposed listing on local Bursa 55 6 S13(1)(c ) Living accom
1 Maintenance on the childcare centre 18 7
(double deductions)
205 15587
-205
Adjusted Business Income 15382
Statutory Employment
(-) Capital Allowances -14266

Statutory Business Income 1116

S4(d) Rental Income Aggregate Income/ To

Rental income from research & development buildings 114 (-)Personal relief
Self relief
(-)Deductible expenses EPF
 Constructions Costs on the Buildings 0 Medical expenses for pa
Medical check up ( max
Aggregate Income 1230 Univerisity fee
（-）Approved Donations Child relief
Donations/ Sponserships expenses for a sports club fund
In kind （unable to deduct）
In cash 505 Chargeable Income
（restricted to 10% of aggregate income） -123

Chargeable Income 1107

(b)(i) The industrial building allowances would be claimed for the research & development
(R&D) building if the company incurred constructions cost on the building.
Besides that, the company carry out the reaserch & development activities in the
R & D building.
In additions, the company incurred capital expenditure for the industrial building.

(ii) No Lah SDN BHD is unable to claim to for IBA as the it doesn’t incurred any
R& D activities in the industrial building even it incurred constructions costs
on the R&D building.

Matahari SDN BHD is also unable to claimed for IBA's on the R&D building
as it doesn’t incurred the constructions costs for the qualifying building expenditure,
R&D building.
QUESTION 6-Taxation of Individual 10/15 MARKS
Ms Yasmeen's employment income received from her employment in Singapore is
not liable to tax in Malaysia.It would be a foreign income received in Malaysia.
Exemptions is given if the foreign income subject to income tax or witholding tax
from the country of origin or no tax imposed on such foreign income due to tax
systems/ threshold/ tax incentives/ unabsorbed loss/ capital allowances/capital gain.

Ms Yasmeen would be a Malaysian tax resident by physically present in Malaysia

for at least 182 days in total in year 2019. S7(1)(a)

However, if Ms Yasmeen doesn't receive any income derived from Malaysia and only
receives the employment income derived from Singapore, then she is not liable
to income tax in Malaysia.

Chargeable Income for Ms Yasmeen for the year of assesment 2019

S4(b) Employment RM RM
Director's fees (12000*3) 36000 0.5
Salary (10k*9) 90000 0.5
Monthly parking allowances (exempted) 0 1
bonus received in 2020 0 0.5
126000
Dental treatment (exempted) 0 0.5
Free consumable goods (max RM 1k) 0 1
Car benefits (5000/2 )*7/12) 1458 0.5

S13(1)(c ) Living accommodations

defined value (3000*12） 36000 0.5
or 30% of 13(1)(a) 37800
whichever is lower 36000

Time-apportionment (36000*6/12) 18000 1

Statutory Employment Income 145458.3

S4(c )Interest income

Intrest from her brother's company 20000 0.5

Aggregate Income/ Total Income 165458

(-)Personal relief
Self relief 9000 0.5
(MAX 4000) 4000 0.5
Medical expenses for parents 8000 0.5
Medical check up ( max 1000) 1000 0.5
Univerisity fee (x for self) 0 0.5
Child relief (married before) 0 0.5

-22000
Chargeable Income 143458
PASS YEAR SEPT 2019 5/10 MARKS
QUESTION 1 RELIEF FOR CAPITAL EXPENDITURE QUESTION 2
(a) Four Main Criteria of Plant & Machinery for the purpose of claiming capital allowances.
(a) Nurul's Real Property
* Plant & Machinery is an equipment used to carry on ordinary course of the
business. Disposal Price
Considerations received
* Plant& Machinery should be used permenantly in the business. (-)Incidental Costs

* Plant & Machinery should not constitude as a part of inventory or stocks Disposal Price
in trade.
(-)Acquisition Price
* Plant & Machinery should not be a part of the premises or the settings Consideration paid
of which the business is carried on. (+) Incidental Costs

Chargeable Gain
(a)(ii) (1)The floor tiles for resale of the I-Tiles Sdn bhd is not eligible to claim the
capital allowances as it is the inventories or stock in trade of the business. (-） Schedule 4 Exempt
RM10,000
(2)The display shelf of the I-Tiles SDN BHD is regarded as plant & machinery OR 10% of Chargeable G
and able to claim capital allowances. It referes to the apparatus to display the
goods of the business of I-Tiles SDN BHD. Whichever is Higher

(3) The fixed partitions doesn’t constitute as a plant & machinery and unable Gain subject to RPGT
to claim the capital allowances since it is a part of the settings / premises
of the business. RPGT Payables

(B)(i）QUALIFYING AGRICULTURAL EXPENDITURE Acquisition Date

Planters SDN BHD (PSB) YA 2018 Disposal Date
RPGT (%)
Items QAE RATE Agriculture Allowances(RM)
Costs to level the land 12000 50% 6000 (b)JNH SDN BHD'S RP

Planting of cocoa 9000 50% 4500 Disposal Price

Considerations received
Replacing rubber with 3000 50% 1500 (-)Incidental Costs
palm oil seedlings (-）Permitted Expenses
Disposal Price
Constructions of 240,000 20% 48000
workers quarters (-)Acquisition Price
Consideration paid
(+) Incidental Costs
Total Agriculture Allowances = 60000 (-)Recoveries

(B)(II) Government Grant Received by Planters SDN BHD. Chargeable Gain

 It is not taxable for the government grant RPGT Payables

QUESTION 3 SALES & SERVICE TAX QUESTION 4

PARTNERSHIPS
(A) Two Example of Suppliers which are out of scope of SST? (2 marks)
*The suppliers of export services is not subject to SST (a) Provisional Adjuste
* The suppliers which is not registered for SST.
*SST is not subjected between the parent company and the subsidiary. Profit Before Tax
*SST is not chargeable to service pertaining to goods or land outside Malaysia. (+/-)Adjustments
Entertainment expenses
ADDITIONAL ANSWER
*Supplier made by a person who is not a taxable person.
*Supplier made by Federal Government/ State Government.
*Supplier made by a local authority or statutory body. Donations in Kind made

(B) Subang SDN BHD

Sales & Service Tax (SST) payable or recoverable for January 2018 Partner's salaries
Items RM RM Medical expenses for Ch
Other deductible expense
1) New Car 0 Interest income from loa

2)parking fees in respect of company 300

Vehicles Provisional Adjusted In
3) Purchase linen materials 600
(-)Partner's entiltlemen
4) Gifted goods with market value RM 5000 283 Partner's salaries
Medical expenses for Ch
5)Payment of golfclub subscriptions fees 0
Divisible Income
6) Imported services from suppliers of 1200 1200
services in Taiwan.
2100 1483 Share of Divisible Incom
Salary
Medical Expenses For C

Objective Questions Adjusted Income

Relief Of Capital Allowances (-)Capital Allowances
Disposal value : higher of sales proceeds/ insurance proceeds ot the market
value Statutory Income
RM RM S4 (c )Interest Income
Residual Expenditure on 2016 100,000
(-)Initial Allowances (20%） 20000 Aggregate Income
(-)Annual Allowances (20%) 20000 (-)Approved Donations
-40000 Donations in kind
Residual Expenditure on 2017 60,000
 Total Income

(-)Annual Allowances (20%)*100,000 20000

-20000 (b) Director General Inla
Residual Expenditure on 2018 40,000 in YA 2017 when the tap
(-)Annual allowances (20%) 0
(no AA at year of disposal)
Residual Expenditure on 2018 40000

Disposal Value 45000

Balancing charge 5000

(Disposal value > residual expenditure )

Balancing allowances
(Disposal value < Residual expenditure)
QUESTION 2 REAL PROPERTY GAIN TAX 10 MARKS

(a) Nurul's Real Property Gain Tax (RPGT) Payables on the exchange of assets on 15/1/2018
RM RM
Disposal Price
Considerations received from JNH 280,000
(-)Incidental Costs Valuation report -1000

Disposal Price 279,000

(-)Acquisition Price
Consideration paid 220000
(+) Incidental Costs Stamp duty 6000
-226000
Chargeable Gain 53,000

(-） Schedule 4 Exemptions Individual only

10000
OR 10% of Chargeable Gain 5300

Whichever is Higher -10000

Gain subject to RPGT 43,000

RPGT Payables 8600

Acquisition Date 6/14/2014

Disposal Date 1/15/2018
20% (4th year)

(b)JNH SDN BHD'S RPGT Payables on the exchange of assets on 15/1/2018

RM RM
Disposal Price
Considerations received from Nurul 300,000
(-)Incidental Costs Valuation report -1000
(-）Permitted Expenses Repainting （deductible expenses) 0
Disposal Price 299,000

(-)Acquisition Price
Consideration paid 90000
(+) Incidental Costs Stamp duty 2000
(-)Recoveries Compensations -3000
-89000
Chargeable Gain 210,000
RPGT Payables (20%) （within 4 years） 42000

QUESTION 4
PARTNERSHIPS 8/10 marks

(a) Provisional Adjusted Income & Divisible Income of the Arts & Crafts Partnerships
RM RM RM
Profit Before Tax 238000
(+/-)Adjustments （-） （+)
Entertainment expenses -gifts to customers when purchase goods 0
Entertainment wholly realted to sales
(100% deductible)

Donations in Kind made to approved donations 23000

(relocations)

Partner's salaries 120,000

Medical expenses for Chen 11000
Other deductible expenses 0
Interest income from loan made to company (Relocation) 18000
18000 392000
-18000
Provisional Adjusted Income 374000

(-)Partner's entiltlement
Partner's salaries 120,000
Medical expenses for Chen 11000
-131,000
Divisible Income 243000

Chen Sharifah Total

Share of Divisible Income 121500 121500 243000
（5000*12 months） 60000 60000 120000
Medical Expenses For Chen 11000 - 11000

Adjusted Income 192500 181500 374000

(-)Capital Allowances
-7000 -7000 -14000
Statutory Income 185500 174500 360000
S4 (c )Interest Income 9000 9000 18000

Aggregate Income
(-)Approved Donations
Donations in kind (unable to deduct) 0 0 0
Total Income 194500 183500 378000

(b) Director General Inland Revenue (DGIR) has the power to raise the judgement assesment
in YA 2017 when the tapayer has failed to make return as required by law.
TAX PASS YEAR
SEPT 2019 QUESTION 6
SECTION B 11/ 15 MARKS Nakha
Chargeable Income &
QUESTION 5-CKF SDN BHD
Chargeable Income Computations for the basis period for the year of assesment 2018 S4(a）Online Business
RM'000 RM'000 Adjusted Income
(-） (+) (+) Balancing charge
Profit Before Tax 13956
(+/-) Adjustment (-)Capital Allowances
0.5 Depreciation (non-deductible) 1419 1
0.5 Allowances from stock obsolences 101 1 Statutory Business Inco
0.5 Allowances for royalty for the year 82 1
-0.5 Allowances for royalty written back (non-taxable) 1 1 S4(b)Employment
0 (1) Amount paid 0 1 S13(1)(a)
0.5 Dividend income from a local subsidiary (relocation) 96 2
1 Compensation for restictve covenants 109 2
1 Consultancy fees Expenses to increase share capital 4 3
(non-deductible) S13(1)(b)
1 Secretarial fees (deductible up to 15k) 0 3
0.5 Tax appeal fees 11 3
‘（1） Foreign Exchange Loss (non trade) (deductible） 0 4
1 Lease Rental Payment (deductible up to 50k)(cost >150k) 15 5 S13(1)( c)
0.5 Traffic Violation Expenses （non-deductible) 1 5
1 Contribution made for sponsoring local arts cultural programme 0 6
（deductible up to 1 mil)
0.5 Leave Passage for Employees （non-deductible) 4 7

206 15593
-206
Adjusted Business Income 15387 Statutory Employment I

(-) Capital Allowances -2300 Aggregate Income

(-)Personal Relief
Statutory Business Income 13087 Self Relief
EPF
S4(c ) Dividend Income Smart Phone for his mot
Dividend income from the local subsidiary (exempted) 0
Chargeable Income
Aggregate Income / Chargeable Income 13087
TAX on First
Bal

Total Tax Payables

 Sumi
(B) Registration of a patents expenses Chargeable Income &

Registrations costs of a patents or trademarks locally will be non-deductible . S4(c ) Dividend Income
Shares in a local compan
However, CKF Bhd incurred some costs in the YA 2019 in respect of register
of a patents for a new product in overseas for purpose of promotion of export (-)Deductible Expenses
quality for double deductions. Interest of loan

Generally , the patent registration expenses are not deduuctible as it is capital Statutory Dividend Inco
expenditure with a view of bring the assets into existence.
S4© Interest Income
Loan extended to her un

(-)Deductible Expenses
Interest of loan

Statutory Interest Incom

Aggregate Total Incom

(-)Personal Relief
Self Relief
Tablet
（restricted TO RM2500
Chargeable Income

TAX on First

Total Tax Payables

QUESTION 6 12/15 MARKS

Chargeable Income & Income Tax Payables Computations for YA 2018

RM RM
S4(a）Online Business
Adjusted Income 86000
(+) Balancing charge 2000
88000
(-)Capital Allowances curreny year 5000
Brought forward 1000 -6000
Statutory Business Income 82000

S4(b)Employment
Salary (RM10000*12MONTHS) 120000
EPF contribution (employer)(exempted) 0
Reimbursement of salary of driver 30000
150000
Domestic Helper (prescribed value) (400*6m) 2400
Leave Passages to trip to Langkawi (local trip) 0
Food & Drinks to all employee 0
2400
Unfurnished Accommodations
Defined Value 2000*12months 24000
30% 0f 13(1)(a) (30%*150,000) 45000

Whichever is lower 24000

Time apportionment (6months /12 * 24000) 12000

Statutory Employment Income 164400

Aggregate Income 246400

(-)Personal Relief
Self Relief 9000
(resticted to maximum 4000) 4000
Smart Phone for his mother as a gift (self, spouse & child) 0
-13000
Chargeable Income 233400

TAX on First RM100,000 10700

RM133,400 AT 24% 32016

Total Tax Payables 42716

Chargeable Income & Income Tax Payables Computations for YA 2018
RM RM
S4(c ) Dividend Income
Shares in a local company (exempted) 0

(-)Deductible Expenses
Interest of loan (300/1000) *RM100,000 -30000

Statutory Dividend Income 0

S4© Interest Income

Loan extended to her uncle's company IN MYS 85000

(-)Deductible Expenses
Interest of loan (700/1000) *RM100,000 -70000

Statutory Interest Income 15000

Aggregate Total Income 15000

(-)Personal Relief
Self Relief 9000
Gift to NAKHA (self, spouse & child) 2500
（restricted TO RM2500) -11500
Chargeable Income 3500

TAX on First RM3,500 AT 0% 0

Total Tax Payables 0

Question 1-Sales & Service Tax QUESTION 2-REAL P
8/10 Marks
(a) 3 Examples of a supply of services which subject to Service Tax. (a) SAMY'S RGPT PA
Disposal Price
* Provide professional services such as legal services, consultancy servies, enginerring Considerations received
services and others (-)Incidental costs

* Food and beverge Disposal Price

* Provide accommodations services (-)Acquisition Price

Considerations paid
* Assign the right to use a patents or copyrights to another person, (+)Incidental costs
* Lend or rent goods to another person.
(-)Recoveries
(b)(i) The taxable period of Singh SDN BHD would be 1 January 2018-28 February 2018
Chargeable Gain/ Allo
Due date of the submissions of service tax return 31-Mar-18 （use to set off chargea

(ii) Repayment of service tax

= total service tax * amount recovered/ total amount of invoice (b)Jeya's RPGT PAYA
"=RM 600*RM 5300/ RM 10600 Disposal Price
=RM300 Considerations Receive
(-)Incidental costs
( C) (I) UNO SDN BHD
- it is a non-servicre tax registrant, hence the home theatre system of RM 10000 (-)Permitted Expenses
is not subject to service tax.
Disposal Price
-Therefore, the service tax payables would be RM 0
(-)Acquisition Price
(II) Service tax payables by Singh woulf be RM5000*6%= 300 Considerations Paid
(+)Incidental costs

Chargeable Gain

(-)Schedule 4 Exemption
RM10,000
OR 10% OF Chargeable
Whichever is higher

(-)Allowable Loss From o

Gain subject to RPGT

RPGT PAYABLES
Question 3 Relief of Capital Expenditure (B) Deductions of Reten
Assets used in the air-conditoner Business Jeya can inform KIP SDN
Items Cost Qualifying Expenditure Rate (%) AA, Annual on the chargeable gain.
Factory building (Notes 1) 1,500,000 1,500,000 3 45000 The rentention sum need
Compressor Machines 100,000 100,000 14 14000 subject to RPGT.
Loader (heavy machines） 40000 40,000 20 8000
Extension of office admin 12000 0 0 0
(It is not an industrial building) Total capital allowances claimed 67000 Question 4-Witholding t
(a) The witholding tax rat
Notes 1 RM (Mambau) to Thai Corpo
Factory building 1,500,000
10% of the aggregate cost 150000 Thus, the design services
witholding tax rate of 10%
Showroom (Included as not exceeded ） 105000
(b)
The cost of the showroom doesn’t exceed the 10% of the aggregate costs. Hence, it is included Under Option 1, Mambau
as the qualifying plant expenditure. design fees of RM 9000 t

Assets used in the electrical fan business The amount of RM 1000

Items Costs Qualifying Expenditure Rate (%) AA,Annual month after the payment
Factory building 100,000 100,000 3 3000
Fan manking machinery 10,000 10,000 14 1400 The whole amount of RM
Total capital allowances claimed 4400 purposes in arriving from

Common assets used in the both business

Option 2
Items Cost Qualifying Expenditure Rate (%) AA, Annual *Mambau will pay the fu
Motorcycles 3,000 3,000 20 600
Office furniture & equipments 50,000 50,000 10 5000 * The amount of RM 100
BHD.
Three office tables 3600 3600 100 3600
（small value assets） Total capital allowances claimed 9200 * Mambau will remit the
month after the payment
Air-conditioner Business Electrical Fan Business
(RM) (RM) *The amount of witholdin
Adjusted income 237000 34000 ordinary business expens
(-)Capital allowances Corporations would be de

Air-conditioner business -67000 Conclusion-

Electrical Fan business -4400

Common assets used in business -5520 -3680 ( c ) The amount of penal

(9200*12mil/20 mil) (9300*8mil/20 mil) late to the IRB.
Statutory Income 164480 25920
The amount of penalty w
QUESTION 2-REAL PROPERTY GAIN TAX
8/10 Marks
(a) SAMY'S RGPT PAYABLES FOR THE YEAR OF ASSESMENT 2018
Disposal Price RM RM
Considerations received 2,100,000 0.5
(-)Incidental costs Legal fees to defend title -105000 0.5

Disposal Price 1,995,000

(-)Acquisition Price
Considerations paid 2,000,000 0.5
(+)Incidental costs Legal fees 70,000 0.5
2,070,000
(-)Recoveries Insurance Compensation -65000 0.5
-2,005,000 0.5
Chargeable Gain/ Allowable Loss -10,000 3
（use to set off chargeable gain on the subsequent disposal)

(b)Jeya's RPGT PAYABLES FOR THE YEAR OFASSESMENT 2018

Disposal Price RM RM
Considerations Received 2,200,000
(-)Incidental costs Advertising costs -2000

(-)Permitted Expenses Enhancement costs -10000

Disposal Price 2,188,000

(-)Acquisition Price
Considerations Paid 2,100,000
(+)Incidental costs Legal fees 61000
-2,161,000
Chargeable Gain 27,000

(-)Schedule 4 Exemptions
10000
OR 10% OF Chargeable Gain 2700
Whichever is higher -10000
17,000
(-)Allowable Loss From other property RM31000 brought forward -17000

Gain subject to RPGT 0

RPGT PAYABLES 0
(B) Deductions of Retention Sum
Jeya can inform KIP SDN BHD , the acquirer since she has the allowable loss available to deduct
on the chargeable gain.
The rentention sum need not be deducted since Jeya is not expected to have a chargeable gain
subject to RPGT.

Question 4-Witholding tax

(a) The witholding tax rate of 10% would be apply to the payment made by Mambau SDN BHD
(Mambau) to Thai Corporations for the design services.

Thus, the design services is the Special Class of Income at S4A (ii) which subject to 10% of
witholding tax rate of 10% as the services was rendered in Malaysia.

Option 1
Under Option 1, Mambau will deduct RM 1000 (10&% of RM 10000) as witholding tax and pay the
design fees of RM 9000 to the Thai Corporations.

The amount of RM 1000 of the witholding tax shall be deductible and remitted to the IRB within 1
month after the payment or creding to the non-resident, Thai Corporations.

The whole amount of RM 10000 as the payment of design fees shal de deuctible for income tax
purposes in arriving from adjusted income.

*Mambau will pay the full amount of the design fees of RM 10000 to Thai Corporations.

* The amount of RM 1000 of witholding tax (RM 10000*10%) would be be bear by Mambau SDN

* Mambau will remit the witholding tax RM 1000 that borne by Mambau to IRB within 1
month after the payment made or crediting to the non-resident person, Thai Corporation.

*The amount of witholding tax, RM 1000 bear by Mambau would not be deductible as it is not the
ordinary business expenses. However, the payment of RM 10000 of the design fees to the Thai
Corporations would be deductible.

Conclusion- Therefore, Mambau SDN BHD is opt to choose Option 1 for income tax
purposes as the amount of witholding tax is deductible in arriving the adjusted
income of Mambau SDN BHD

( c ) The amount of penalty would be 10% of the witholding tax if th Mambau pays the witholding tax
late to the IRB.
The amount of penalty would be RM 100. (Witholding tax RM 1000*10%)
QUESTION 5 QUESTION 6-
Silat SDN BHD (SSB) Faridah
Chargeable Income Computations for the basis period for the year of assesment 2018 Chargeable Income Compu
RM'000 RM'000 (A)Assume Azman elect fo
Profit Before Tax 2578 Self
(+/-) Adjustment Spouse
0.5 Depreciation (non-deductible) 390 1 S4(b) Employment
0.5 Rental Income （relocation) 600 2 S13(1)(a)
0.5 Gain on disposal of building (capital gain) 900 2
Compensations received from insurance (taxable) 0 2
Property Expenses-Assessment & other maintenance 5 3
Legal fees on the terminations of the tenancy agreement 2 3
Legal fees on the sales & purchase of the property 10 3

Entertainment of a subsidiary’s marketing employees 28 4

(non-company employees )(non-deductible)
S13(1)(b)
Contributions of public amenity (deductible) 0 5
Compensations to an ex-employees (deductible) 0 5 S13(1)(d)
(for downsizing purposes)
Remunerations of disabled staff (double deductions) 12 5
Embezzlement by director (non-deductible) 22 5
(loss of cash; conducted by management) Statutory Employment

1512 3035 S4(c ) Interest Income

-1512 Interest income from a loa
Adjusted Business Income 1523
Aggregate Income/ Tot
(-) Capital Allowances -1007
Total Income of Faridah
Statutory Business Income 516 Total Income of Azman
Total Aggregate Incom
S4(a) Letting Out the real property
Rental income from factory building 600 (-)Personal Relief
Self Relief
(-)Deductible Expenses Spouse Relief
Property Expenses-Assessment & other maintenance 5 Medical expenses for fathe
Legal fees on the terminations of the tenancy 0 Master's degree fees
Legal fees on the sales & purchase of the property 0 -5 Child Relief
(unable to deduct , capital in nature) EPF
Adjusted income from letting out the real property 595
Chargeable Income
(+)Balancing charge 34 Tax on first
Statutory income from letting out the real property 629 Tax on balance
 (-)Zakat Payment
Net Tax Payables
Aggregate statutory business income 1145
(-) business loss brought forward -668 AZMAN
Income Tax Compuatio
Net aggregate statutory business income 477 S4(a）Business
Adjusted Income
Tax Payables (477000*24%) 114.48
S4( c) Interest Income
Interest of fixed deposits
(b) The finance director's belief on the disposal of the property will be
subject to income tax would be wrong. Aggregate Income
The maintenance and support services provided comprehensively &
actively for the property in Lot 007 would only determine whether (-)Personal Relief
it is assessed under S4(a) or under S4(d). Self Relief
In this scenario, the income would be assesed under S4(a) as business
income. Chargeable Income

The disposal of the property would not subject to income tax as it is *Zakat Perniagaan is unable
capital in nature. It represent the loss of source of income. (restricted to 2.5% of aggrega

*The gain on disposal of factory building represent gain of disposal of

investment property (fixed capital) of the business. (B)(I)

(B)(ii)
QUESTION 6-

Chargeable Income Computations & Income Tax Payables Computations YA 2018

(A)Assume Azman elect for joint assesment
Faridah
Azman RM RM
S4(b) Employment
Salary 480,000
13TH month salary paid in Jan 2019 0
Interest Subsidy for housing loan RM 600,000
First RM 300K (Exempted) 0
Bal RM 300K (taxable) 6000

Employer's contribution of EPF 0

Car (>5 years )(prescribe value/2) 1800

Withdrawal from unapproved private retirement funds

(60% -employer's portion) 60000
(40%-employee portion ; not subject to income tax)

Statutory Employment Income 547800

S4(c ) Interest Income

Interest income from a loan made to a Malaysia Company 5600

Aggregate Income/ Total Income 553400

Total Income of Faridah 553400

Total Income of Azman 3705
Total Aggregate Income 557105

(-)Personal Relief
Self Relief 9000
Spouse Relief (Joint assesment) 4000
Medical expenses for father in law (not own parents) 0
Master's degree fees (x self) 0
Child Relief (married) 0
(Restricted to 4000) 4000
-17000
Chargeable Income 540105
Tax on first RM400,000 83450
Tax on balance RM140,105 AT 25% 35026
(-)Zakat Payment -6500
Net Tax Payables 28526

Income Tax Compuations for YA 2018

S4(a）Business RM RM
Adjusted Income 3705

S4( c) Interest Income

Interest of fixed deposits (exempted) 0

Aggregate Income 3705

(-)Personal Relief
Self Relief -9000

Chargeable Income 0

*Zakat Perniagaan is unable to deduct as it is only available for company to deduct.

(restricted to 2.5% of aggregate income)

The payment of director' fee is subject to income tax in Malaysia as the director's fee
is deemed derived from Malaysia. It represent the empliyment income of a drirector in a
company resident in Malaysia.S2(d). It is a Malaysia source of income.

As the director is a non-resident, the amount would be deducted on the Monthly

Tax Deductions Schemes (MTD) at a flat rate of 30% (RM 10000*30%=RM3000)

The due date of Sun Ray SDN BHD should remit the witheld amount would be
15 TH Augyust 2018. ( every 15the of the following month).