CONFIDENTIAL 1 AC/APR 2019/TAX267

UNIVERSITI TEKNOLOGI MARA

COMMON TEST 1

COURSE : TAXATION 1
COURSE CODE : TAX267
EXAMINATION : APRIL 2019
TIME : 1 HOUR 30 MINUTES

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INSTRUCTIONS TO CANDIDATES

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1. This question paper consists of three (3) questions.
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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
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invigilator.
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4. Please check to make sure that this test pack consists of :

i) the Question Paper

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

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5. Answer ALL questions in English.

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DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 5 printed pages
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 CONFIDENTIAL 2 AC/APR 2019/TAX267

QUESTION 1

A. Briefly explain TWO (2) reasons why it is important to establish the concept of
“person”.
(2 marks)

B. Capital receipts are not chargeable to income tax. List THREE (3) examples of
capital receipts.
(3 marks)
(Total: 5 marks)

QUESTION 2

Khairul, a Malaysian citizen was employed by Malaysia External Trade Development

Corporation (MATRADE) in September 2012. MATRADE is a statutory authority established

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with the objective of promoting Malaysia’s export. On 31 December 2012, he was posted to

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Indonesia to serve at the representative office as a trade commissioner.

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However, on 1 July 2014, he came back to Malaysia and resigned from the organization to

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set up his own business. The following is the pattern of stay in Malaysia from year 2014 until
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2018.
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Year Period of stay Note
2014 1 July – 31 December
2015 1 January – 28 February
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2016 Not in Malaysia i

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2017 15 August – 30 September ii

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15 October – 15 December
2018 1 March – 31 October

Note:-
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i. He was in Thailand to run a newly opened branch in Bangkok.

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ii. From 1 October 2017 to 14 October 2017, he was in Germany to accompany his son
who was undergone lung surgery.
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Required:
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a. Determine the resident status of Khairul for the year of assessment 2013 up to the
year of assessment 2018. State the related sections and reasons for your answers.
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(12 marks)
b. Briefly explain THREE (3) advantages of being Malaysian tax resident.
(3 marks)
(Total: 15 marks)

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 CONFIDENTIAL 3 AC/APR 2019/TAX267

QUESTION 3

Nur Thara was appointed as an Accounts Executive at Sejati Sdn Bhd on 1 June 2011. On
30 November 2018, her service was terminated due to a disagreement with the
management. She was paid gratuity of RM89,200 and compensation for loss of employment
amounting to RM125,000.

Details of her remunerations and benefits received from the company for the year 2018 were
as follows:

a. Her monthly salary was RM6,455 after deducting 11% EPF, housing loan RM1,500
and the schedular tax deduction of RM500 per month.

b. She received a three-month salary was paid as bonus in July 2018.

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c. In February 2016, she was offered an option to buy 25,000 unit of the company's

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shares at RM3.00 per unit. The market price of the shares at that time was RM5.49

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per unit. In March 2018 she exercised the option to buy 15,000 units when the

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market price was RM7.00 per unit.

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d. She was provided with a fully furnished condominium and a maid until 30 June 2018.
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The rental of the condominium paid by the employer was RM3,500 per month
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(including furniture of RM1,000 per month). The maid was paid RM1,000 per month.
Nur Thara was required to pay an additional RM500 per month as maintenance for
the accommodation.
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e. In January 2018, she was provided with a new car costing RM130,000 for her own
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use until 30 November 2018.

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f. She sent her two daughters, both aged below 12 years old to a childcare facility as
she received child care allowance amounting RM4,200.
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g. She was given a gift voucher amounting to RM1,300 as a congratulatory gift to her
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new born baby in May 2018.

h. A driver was hired by her until 30 November 2018 with a salary of RM1,500 per
month, and the amount was reimbursed by the company to her.
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i. In March 2018, she went for a vacation to Mabul Island, Sabah, which was fully paid
by the company including the scuba diving course. Total expenses for the vacation
was RM6,500 inclusive RM2,500 for the scuba diving course.
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j. In August 2018, her mother had undergone a heart-bypass surgery at Institute

Jantung Negara costing RM50,000. The bill was paid by Sejati Sdn Bhd.

k. She withdrew RM160,000 from unapproved fund of which 40% represents the
employee's contribution.

l. The entertainment allowance of RM1,700 per month were credited to her account.
The amount expended for official duties on entertaining clients was RM21,000.

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 CONFIDENTIAL 4 AC/APR 2019/TAX267

Required:

Compute the statutory employment income for Nur Thara for the year of assessment 2018.

(Total: 20 marks)

END OF QUESTION PAPER

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 CONFIDENTIAL APPENDIX 1 AC/APRIL2019/TAX267

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

Cost of car when new Annual value of BIK

RM RM
Up to 50,000 1,200
50,001 - 75,000 2,400
75,001 - 100,000 3,600
100,001 - 150,000 5,000
150,001 - 200,000 7,000
200,001 - 250,000 9,000
250,001 - 350,000 15,000
350,001 - 500,000 21,250
500,001 and above 25,000

The value of the car benefit equivalent to half of the above rates is taken if the car

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provided is more than five years old.

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

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Household furnishing, apparatus and appliances
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Types of BIK Annual value of BIK
RM
Semi-furnished with furniture in lounge,
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dining room or bedroom 840

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Plus one or more of the following:

Air-conditioners, curtains, carpets 1,680

Plus one or more of the following:

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Kitchen equipment, crockery, utensils,

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appliances
i.e fully furnished 3,360
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