2009-03tax - CONFIDENTIAL 1 MIA QE/MARCH 2009 ANSWER 1 1(a...

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CONFIDENTIAL 1 MIA QE/MARCH 2009 CONFIDENTIAL ANSWER 1 1. (a) Computation of Tax Payable for Navy Sdn Bhd YA 2008 RM RM + - Sec 4 (a): Net profit before taxation 1,053,100 (-) Other income: Interest (1) 25,000 Gain on sales of land (2) 600,000 Rental (3) 40,000 Adjustments: Cost of sale (4) Stock obsolescence 19,500 Insurance (no double deduction) NIL Damaged goods written off NIL Miscellaneous(5) Stamp duty 18,000 Forex gain (unrealised) 20,000 Forex loss(unrealised) 37,000 Donation(6) Equipment 4,000 Cash 7,500 Leasing (7) – (72,800 – 50,000 max) 22,800 Entertainment (8) Dinner-client (50%) 20,650 Lunch-employees NIL Sponsorship-local (mx 300,000) 18,000 Cost of souvenirs (double deduction) 71,000 Repairs and maintenance (9) Extension-factory (porch) 68,500 Upgrading protection system 21,500 Director’s motor vehicle expenses NIL Resurfacing-factory carpark NIL Depreciation on fixed assets 62,500 Professional charges (10) Legal fees-trade debts NIL Legal fees-tax appeal 12,000 Renewal of trade mark NIL Staff recruitment NIL Business zakat 40,000 General and Administration (11) Compensation to ex-staff NIL Annual subscription toTrade Association NIL Traffic fine 6,100 Refreshment-annual general meeting 110,500 Freight and insurance (12) (double deduction) 116,000
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CONFIDENTIAL 2 MIA QE/MARCH 2009 CONFIDENTIAL Staff welfare (13) Staff medical and dental benefits NIL Child care maintenance NIL Loan to employees 90,000 Leave passage for directors 25,000 Scholarship NIL Remuneration (14) Disabled employee (double deduction) 40,000 Unemployed graduate (single deduction) NIL EPF 149,900 – 19% (612,000 + 102,000) 14,240 Bonus NIL Expatriate employee NIL Unapproved fund 14,600 1665,490 912,000 (912,000 ) Adjusted Income 753,490 (-) Capital Allowances Current year = 195,000 Brought forward = 12,100 Factory protection system (20%+14%x21,500)=7,310 (214,410) Statutory Income 539,080 (-) Brought forward business loss-sec 43(2) (42,300) 496,780 Add: Other Income Interest (exempt) NIL Rental (exempt) NIL Gain NIL Aggregate Income 496,780 (-) Approved donation(cash and kind)-not qualified NIL (-) Business zakat (max 2.5%x Aggregate Income) (40,000 subject to 2.5% x 498,780) (12,270 ) Total/Chargeable Income 484,310 Tax [email protected] 20%x484,310 = RM96,862 (15 marks) (b) The compensation received is taxable because it is a revenue receipt. Points to be considered: 1. RPSB is a property developer company. 2. The company had the intention to develop the land into a residential area and derive income from the sale of houses ,i.e trading. 3. Compensation received “fills a hole in the profits’ because if the land is developed and houses built, RPSB would have sold the houses and made a profit. (2 marks) (Total:17 marks)
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CONFIDENTIAL 3 MIA QE/MARCH 2009 CONFIDENTIAL ANSWER 2 (a) (i) Residence status of Mr. Joseph YA 2006 - Resident under Sec. 7(1)(b). present in M’sia for less than 182 days but linked to YA 2007 by temporary absence and number of days in 2007 is at least 182 consecutive days. YA 2007 - Resident under Sec. 7(1)(a), present in Malaysia for at least 182 days. YA 2008 - Resident under sec 7(1)(b) present in M’sia for less than 182 days but linked by YA 2007 and the number of days in 2007 is at least 182 days.
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