CONFIDENTIAL AC/JAN 2023/TAX267/TEST

UNIVERSITI TEKNOLOGI MARA

TEST

COURSE : TAXATION 1
COURSE CODE : TAX267
EXAMINATION : 10 JANUARY 2023
TIME : 1 HOUR 30 MINUTES

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of three (3) questions.

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 invigilator.

4. Please check to make sure that this examination pack consists of:

i) the Question Paper

ii) a four-page Appendix 1
iii) an Answer Booklet – provided by the Faculty

5. Answer ALL questions in English.

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 CONFIDENTIAL AC/JAN 2023/TAX267/TEST

QUESTION 1
Ronald Messi, a Canadian national was employed as an oil palm specialist by IOI Plantation
Berhad. He arrived in Malaysia for the first time on 1 December 2017. Details of his stay in
Malaysia are as follows:

Year Periods of stay Notes

2017 1/12/2017 - 31/12/2017
2018 13/12/2018 - 25/12/2018 1
2019 4/1/2019 - 26/7/2019
2020 1/1/2020 - 30/3/2020
1/7/2020 - 15/11/2020
2021 1/5/2021 - 10/6/2021
2022 15/4/2022 - 17/7/2020 2

Notes:
1. He went to Morocco to attend a course related to his work from 26 December 2018 to 3
January 2019.
2. From 18 July 2022 onwards, he left Malaysia permanently.
Required:
Determine the tax residence status of Ronald Messi for the relevant years of assessment 2017
until year of assessment 2022. Provide the relevant sections and reasons to support your
answers.
(15 marks)

QUESTION 2
A. Uranus Manufacturing Sdn Bhd was incorporated on 1 January 2020 and made up its
account to 31 December each year. The company bought a piece of land for the purpose
of constructing a factory. The following expenses were incurred to construct the factory.

Expenditure RM
Land 170,000
Legal fee (RM7,000 was related to land) 20,000
Stamp duty for purchase of land 3,500
Demolishing an old factory 25,000
Architect’s fee 22,000
Approval of plan – local authority 5,000
Construction cost 340,000

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In September 2020, it completed the construction of its factory. 6% of the total floor
space of the factory building was used as office and 5% for showroom.

The company also acquired the following assets:

1. BMW X1 (passenger car)

Cash price: RM220,000
Deposit: RM80,000 (paid on December, 2020)
Monthly instalment: RM2,700
No. of instalment : 56 months (commenced on 15 December 2020)

2. An industrial shredder machine costing RM36,000 was bought on 1 November 2021.

On 30 November 2022, the machine was sold for RM22,000 without commercial
justification.

3. On 15 August 2022, a set of Nordic solid wood dining table purchased for personal
use was brought into the business. The market value and net book value were
RM3,550 and RM2,500 respectively.

Required:

Compute the capital allowance, industrial building allowance, balancing allowance or

balancing charge (if any) for each asset of Uranus Manufacturing Sdn Bhd for all relevant
years of assessment up to year of assessment 2022.
(17 marks)

B. Julang Plantation Sdn Bhd has been involved in cultivating golden melons since 2015 and
prepares its account to 31 May annually. In 2019, the company bought a piece of land in
Banting, Selangor and used to plant golden melons.

Date Expenditure RM
01/05/2019 Cost of land 1,200,000
15/12/2019 Clearing of land 155,000
31/07/2020 Cost of planting 270,000
01/10/2021 Construction of estate office 60,000

The company was awarded a grant of RM100,000 for the cost of planting in June 2020.
Due to restructuring, the company decided to sell the entire farm except for the estate office
to Gama Jaya Sdn Bhd (year end 31 December) on 5 January 2022 for a sum of
RM3,500,000.

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 CONFIDENTIAL AC/JAN 2023/TAX267/TEST

Required:

Calculate the agriculture allowances/(charges) for Julang Plantation Sdn Bhd for the
relevant years of assessment up to the year of assessment 2022. Assuming that the
company made an election to spread back the agriculture charges. Round off your answers
to the nearest RM.
(8 marks)
(Total: 25 marks)

QUESTION 3

Adam, Maxim and Lea formed a partnership known as “Superb Consultancy & Training” that
offers professional advice, guidance, and actionable solutions to businesses since 2018.
Maxim ceased to be a partner on 31 July 2022 and Kalsom joined the partnership on 1 August
2022. For the year ended 31 December 2022, the partnership reported a provisional adjusted
income of RM190,553.
The terms of the partnership arrangement are as follow:
Adam Maxim Lea Kalsom
RM RM RM RM
Capital contribution:
 Up to 31 July 2022 80,000 30,000 40,000 -
 Starting 1 August 2022 90,000 - 40,000 60,000
Profit sharing ratio
 Up to 31 July 2022 2/4 1/4 1/4 -
 Starting 1 August 2022 60% - 10% 30%
Salary per month 4,500 3,000 1,500 3,500
Interest on capital 5% per annum
Car maintenance per month 200 - - -
Meal allowance per month - - - 100

Other information:
1. On 31 May 2022, the partnership made an approved donation of RM18,000 to Rumah Anak-
anak Yatim Selangor.
2. Kalsom received annual rental income since 2021 amounted to RM12,000. Meanwhile, Lea
owns another sole proprietor business with a statutory income of RM10,000.
3. Capital allowance claimed was RM17,000.
Required:
a. Determine the divisible income of the partnership for the year of assessment 2022. Round
off your answers to the nearest RM.
(4 marks)
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b. Calculate the total income for Adam, Maxim, Lea and Kalsom for the year of assessment
2022. Round off your answers to the nearest RM.

(6 marks)
(Total: 10 marks)
(TOTAL: 50 MARKS)

END OF QUESTION PAPER

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CONFIDENTIAL APPENDIX 1 (1) AC/JAN 2023/TAX267/TEST

 The following tax rates are to be used in answering the questions

a) Resident individuals

Chargeable Income (RM) Rate Cumulative Tax (RM)

0 - 2,500 0% 0
2,501 - 5,000 0% 0
5,001 - 10,000 1% 50
10,001 - 20,000 1% 150
20,001 - 35,000 3% 600
35,001 - 50,000 8% 1,800
50,001 - 70,000 13% 4,400
70,001 - 100,000 21% 10,700
100,001 - 250,000 24% 46,700
250,001 - 400,000 24.5% 83,450
400,001 - 600,000 25% 133,450
600,001 - 1,000,000 26% 237,450
1,000,001 - 2,000,000 28% 517,450
Above 2,000,000 30%

b) Non-resident individuals 30%

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

Cost of car Prescribed annual value Prescribed annual

(when new) of private usage of car value of private petrol
RM RM RM
Up to 50,000 1,200 600
50,001 - 75,000 2,400 900
75,001 - 100,000 3,600 1,200
100,001 - 150,000 5,000 1,500
150,001 - 200,000 7,000 1,800
200,001 - 250,000 9,000 2,100
250,001 - 350,000 15,000 2,400
350,001 - 500,000 21,250 2,700
500,001 and above 25,000 3,000

The value of the car benefit equivalent to half of the above rates is taken if the car
provided is more than five years old.

Where a driver is provided, the value benefit is fixed at RM600 per month.

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CONFIDENTIAL APPENDIX 1 (2) AC/JAN 2023/TAX267/TEST

 Household furnishing, apparatus and appliances

Types of BIK Annual value of BIK

RM
Semi-furnished with furniture in lounge,
dining room or bedroom 840

Plus one or more of the following:

Air-conditioners, curtains, carpets 1,680

Plus one or more of the following:

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

 Rates of Capital Allowances

Motor Heavy Plant General Computers Others Building

Vehicles & Machinery Plant & & Software
Machinery
Initial 20% 20% 20% 20% 20% 10%
allowance
Annual 20% 20% 14% 20% 10% 3%
allowance

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CONFIDENTIAL APPENDIX 1 (3) AC/JAN 2023/TAX267/TEST

 Personal Reliefs

RM
Self 9,000
Disabled self, additional 6,000
Medical expenses expended on parents (maximum) 8,000
Medical expenses expended on self, spouse or child with serious (maximum) 8,000
disease including well-being relief of RM1,000
Basic supporting equipment for disabled self, spouse, child or parent (maximum) 6,000
Study course fees for skills or qualifications (up to RM2,000 for
upskilling or self enhancement course) (maximum) 7,000
Lifestyle (maximum) 2,500
Lifestyle, additional (purchase of personal computer/ smartphone/
tablet) (additional) (maximum) 2,500
Healthy lifestyle (sport equipment, entrance fee to sport activity, etc.) (maximum) 500
Spouse relief 4,000
Disabled spouse, additional 5,000
Child - basic rate (each) 2,000
Child - higher rate (each) 8,000
Disabled child (each) 6,000
Disabled child, additional (each) 8,000
Childcare fees (below six years old) (maximum) 3,000
Breastfeeding equipment (maximum) 1,000
Life insurance premium (maximum) 3,000
Contribution to approved provident fund (maximum) 4,000
Contribution relating to widow, widower or orphan’s pension or under (maximum) 4,000
any approved scheme
Life insurance (Pensionable public servant) (maximum) 7,000
Private retirement scheme contribution, deferred annuity premium (maximum) 3,000
Medical and/or education insurance premium for self, spouse or child (maximum) 3,000
Deposit for a child into the Skim Simpanan Pendidikan Nasional
(SSPN) (maximum) 8,000
Contribution to the Social Security Organisation (SOCSO) and EIS (maximum) 350
contribution
Domestic travelling expenses (local tour package, accommodation &
entrance fee) (maximum) 1,000
Electric vehicle charging facility (maximum) 2,500

 Hak Cipta Universiti Teknologi MARA

CONFIDENTIAL APPENDIX 1 (4) AC/JAN 2023/TAX267/TEST

 Rebates

Chargeable income not exceeding RM35,000 RM

* Individual – basic rate 400
* Additional rebate when wife/husband relief is claimed 400
Departure levy for umrah travel / religious travel for other religions

Flight class Destination/rate

ASEAN Others
RM RM
Economy 8 20
Business/First 50 150

Zakat/Fitrah Amount incurred