BAC308 Taxation in Malaysia - Course Assessment 1 (May 2022)

1. Tax rates, deduction entitlements, and tax treatments depend on whether the taxpayer is a resident or otherwise. Explain two (2) benefits of becoming a Malaysian tax resident. [10 marks]

2. Describe the considerations a tax practitioner must take into account while determining whether a taxpayer is employed or self-employed. [10 marks]

3. State the objectives of a Double Taxation Agreement. [10 marks]

4.
a) Explain why the Customs (Amendment) Act 2018 and Free Zones (Amendment) Act 2018 were introduced by Parliament. [6 marks]

b) Provide the requirements for issuing invoices under the Sales Tax Act 2018. [4 marks]

5. List the types of income subject to Income Tax in Malaysia. [10 marks]

6. Mr. Bo, a manager at Mamu Papi, earns an RM10,000 salary per month. He has worked in the same company for the past 20 years. As an appreciation for his long service, he is provided with the following benefits:
- An unfurnished condo at 1 Persiaran Gurney, with a rental of RM4,000 per month paid by the employer.
- The employer's portion of the Employee's Provident Fund is 12% of his monthly salary.
- A new Sports Utility Vehicle (SUV) costing RM150,000 was given to him since 2018. The company does not provide him with petrol allowances as the car is a hybrid.
- A gardener paid RM400 per month.
- A half-day maid paid RM500 per month.
- The company paid for RM10,000 worth of airfare for Mr. Bo and his family to go for a holiday in Singapore in January 2021.
- RM2,000 in medical and dental benefits.

Mr. Bo also receives the following additional income:
- RM3,500 single-tier dividend from Tenaga Nasional Berhad.
- Net dividend income of RM12,750.
- Interest income of RM2,000 from Bank Simpanan Nasional.
- Royalties of RM22,500 from writing songs for Radio Malaysia.
- Rental income of RM2,200 per month. He pays interest of RM560 a month to Public Bank.
- Paid assessment and quit rent of RM1,350 a year. He repainted the house for RM1,000 and extended the kitchen for RM4,500.

Mrs. Bo is a full-time housewife since she lost her job two years ago. They have two children:
1. Stanley, 20 years old, is studying at Universiti Sains Malaysia. The university fees for 2021 amounted to RM18,000.
2. Josie, 15 years old, is studying at SMJK(C) Ping Wah. The cost of her education is RM4,500 in 2021.

During the year, Mr. Bo incurred RM10,000 on diabetes treatment for his father. He pays a yearly takaful premium of RM1,400 to BSN Prudential.

Required:
Compute the tax payable by Mr. Bo Kau Looi for the year of assessment 2021. [50 marks]