UKAT3033/UBAT3033 Taxation II

TUTORIAL 3 (Questions)

Q1 Determine the tax deductibility of the following entertainment expenses by ticking on the
relevant column:

Allowed a deduction
of
No deduction
Type of Expenses 100% 50% is allowed

Provision of vintage tea set as wedding gift to

customer

Provision of meals by an airline company to its

passengers

Gift of grand opening flower stand to customer

Congratulatory advertisement featuring company’s

logo and the type of services that it offers

Sponsorship for food, drink, sports attire and sports

equipment for sportsmen in a badminton
tournament open to members of the public by a
company selling sports gear and sports equipment

Q2 Tennox Sdn Bhd (closes its accounts on 31 December annually) obtained a loan from its
holding company for the purpose of its business as follows:

Date the Loan

Loan Amount Rate of Interest and Interest is
Date of Loan (RM) (%) Loan Period Due to be Paid
6%
1.7.2015 1 million 5 years 30.6.2020
(non-cumulative)

Tennox Sdn Bhd did not make any interest payment until the due date specified above.
Discuss the timing of tax deductibility of the interest over the 5 YAs from YA 2015 to YA
2020.

Q3 ColourGen Sdn Bhd is a resident company in Malaysia and carried on the business of
manufacturing paint for the domestic as well as overseas markets. To expand the market, in the
YA 2016, the company conducted a series of negotiations and signed a contract selling new
products to new customers abroad. The following expenses were incurred:

Type of Expenses RM
Travel fare (economy class) 1,000
Travel fare (business class) 5,000
UKAT3033/UBAT3033 Taxation II

Cost of accommodation
4,800
(RM400 x 6 days x 2 persons)
Sustenance
3,000
(RM250 x 6 days x 2 person)
Determine the total deduction allowed in respect of the above expenses for ColourGen Sdn Bhd
in YA 2016.

Q4 Bank W encountered theft where its bank officer stole money from customers’ accounts. When
detected it was found that RM20,000 had been embezzled. The bank subsequently terminated
the services of the bank officer.
Determine the tax deductibility of the money loss caused by theft.

Q5 White Snow Cosmetics Sdn Bhd was incorporated on 1.9.2017. White Snow Cosmetics Sdn Bhd
advertised in several local newspapers for various positions available in the company. It engaged
an employment agency to recruit 100 foreign workers for its production department. White Snow
Cosmetics Sdn Bhd also sought the services of a head-hunting company to recruit a suitable
person as its Finance Controller. The recruitment fees charged by the employment agency and
head-hunting company were RM50,000 and RM15,000 respectively.
White Snow Cosmetics Sdn Bhd commenced operations on 1.4.2018 and closed its accounts on
31.12.2018. The Finance Controller started his employment on 1.3.2018. White Snow Cosmetics
Sdn Bhd had to pay a salary of RM30,000, employer’s contribution to the Employees Provident
Fund (EPF) of RM3,600 and miscellaneous administrative expenses of RM3,000 for the month of
March 2018.
Determine the tax deductibility of the abovementioned expenses.