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MBAC 4163
Answer Scheme
Question 1
RM
Cost of machinery 150,000
Cost of preparing site for installation 460,00/
Total cost 610,000
Question 2
RM RM
YA 2008 Qualifying building expenditure 3,600,000
(YA 31/12/2007)/ Initial allowance
(10% x RM3,600,000) 360,000
Annual allowance
(3% x RM360,000) 108,000 (468,000)
Residual expenditure 3,132,000
YA 2009 to 2010 Annual allowance
(3% x RM3,600,000X 2 yrs) (216,000)
Residual expenditure 2,916,000
YA2011 Notional allowance
(2% x RM3,600,000) (72,000)
Residual expenditure 2,844,000
YA2012 Annual allowance
(3%x RM3,600,000) (108,000)
Residual expenditure 2,736,000
YA 2013 Annual allowance
(3% x RM360,000) (108,000)
Residual expenditure ,2628,00/
1
c. RM RM
YA 2016
AA(3%) 3,000
RE 84,000
YA 2017
AA(3%X100,000) 3,000
RE 81,000
Question 2
a) i) Scope of WHT
i. Special classes of income – s109B of ITA,1967. Tax rate is 10% and it is final
tax. (1/2 mark)
ii. Interest received by resident and non-resident – s109C (on resident –5%)
and s109 (non-resident – 10%) The tax is final. (1 mark).
2
iii. Royalty – s109 – 15%. The tax is final. (1/2 mark)
iv. Contract payment – s 107A of ITA ,1967. The tax rate is 10+3% and the tax is
not final. (1 mark)
v. Payment for public entertainers – s109A. tax rate is 15% and it is final tax.
(1/2 mark)
vi. Other income (s 4f) – tax rate is 10% and it is final (1/2 marks)
(4 marks)
ii)
Payment Withholding tax (WHT)
1 RM15 mil - Plant & WHT is not applicable on the contract payments which
equipment represent the supply of plant (materials) – (1 mark)
2 RM1 mil - rental Payment for lease of the plant is a special class of income
equipment under s4A and to a non-resident (1 mark). subject to 10%
WHT (1 mark). The tax is final (1 mark)
3 RM 300 000 for WHT is not applicable on the contract payments as it does
shipment not represent service under a contract or technical
services – (1 mark)
4 RM 2.5 million WHT is applicable under s107A at the rate of (10+3) % (1
installation work mark) on the installation work as it is payment to non-
performed locally resident contractor for services performed in Malaysia. (1
mark). The tax is not final . (1 mark)
5 RM 100,000 as Since interest is the responsibility of Malaysian
interest charged government, it would deem to be derived in Malaysia. (1
for late payment mark) Subject to WHT at 15% rate under s109(1) (1
mark). The tax is final
(10 marks)