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Cyberjaya Campus

BFN 3114 Tax Planning
TRIMESTER 1, 2016/2017



The assignment carries a total of 100 marks and would constitute 15 percent of the carry


Attempt the assignment using your own words to present the arguments, discussions and
your views in a cohesive and comprehensive manner. References and authorities must be
cited where appropriate using the APA format.


Each group shall comprise 2 4 members (an exception would be made for the last group


Submit only one (1) hard copy


All assignments must be typewritten, stapled and tape bound.


The first page MUST contain the following information in the order indicated:
a) Name of the university, subject and code number and lecturers name; and
b) Name of the group leader on the first line and the student name, ID number and the
mobile contact number of each and every member of the group.


Marks will be deducted at the discretion of the lecturer for any non-compliance with
assignment protocol prescribed herein.


The submission deadline is Tuesday, 3 pm, 27 Sept 2016

Assignment: BFN 3114 Tri 1, 2016/2017

Malaysia has moved to self-assessment system (SAS) effectively from 2004 onwards. With the
introduction of SAS, the responsibilities has changed a lot to taxpayers hand. Taxpayers are
expected to perform the required tasks under the new system. SAS demands taxpayers to perform the
primary tasks that were previously handled by the tax authority, which emphasizes on completing tax
returns accurately, including computing tax liabilities correctly. The successful implementation of
SAS, therefore, relies heavily on the performance of the taxpayers in carrying out their

Discuss the self-assessment system in details, especially in the area of the taxation of
employment income and business income, and


Discuss any issues or problem related to the system, and provide your opinion on ways to
solve the issue.
[50 marks]

Mr Jeffrey Cheah (Jeffrey) is a senior executive working with a local consulting company (the
company). He is married to Mrs. Pauline, a teacher at primary school in Cyberjaya. The couple has
two children together, and all of them are Malaysian residents for the purposes of the Income Tax Act
1967 (as amended). The following information applies to Mr. Jeffrey and his wife, Mrs. Pauline.
Mr. Jeffrey:
His income and benefits from his employment for the year ended 31 December 2015 are as follows:

Gross salary of RM11,500 per month. His employer contributes 11% and he contributes 10%
to the Employee Provident Fund.


An entertainment allowance and travelling allowance of RM12,000 and RM6,000 per annum


Jeffrey was a hard-working, creative and loyal worker. He has work with the company for 10
years. During the companys annual dinner, he was awarded the services award and granted a
token sum of RM10,000 in appreciation of his contributions.


He was provided with a car by the company, including fuel, for official and private use. It is a
seven-year-old car that originally cost the company of RM180,000 when new.


He was given medical benefits up to a maximum of R M3,000.


He was also provided with a house. The company paid a rent of RM2,000 for the unfurnished
house. Jeffrey had furnished the house at his own expense to accommodate the needs of his
disabled wife. In 2015, he had occupied the house for the whole year.

Assignment: BFN 3114 Tri 1, 2016/2017


Leave passage to Kota Kinabalu, Malaysia and Bali, Indonesia at a cost of RM1,500 and
RM7,000 respectively.


Jeffrey spent in total of RM4,500 per annum to entertain company clients. This expenditure
was spent in the course of his duties and he has filed the receipts for his references in the


Jeffreys parent stays with him. In 2015, he spent RM4,100 for their medical expenses. He
had also spent RM2,000 for his parent in laws medical treatment.


Jeffrey donated RM3,000 to an approved charitable body as part of his spiritual calling. He
had also donated hampers worth of RM1,000 to orphanage house, an approved charitable
body in Selangor.


He has three children and has spent on their education and maintenance as follows:
RM10,000 on the first child, aged 14 years old who is currently studying at a local secondary
RM9,000 on his second child, aged 12 years old and currently studying at an international
RM4,000 on the third child, aged 6 years old and currently attending early learning center at a
private nursery school.


He bought personal life insurance of RM2,000 premium per annum and education insurance
for the kids of RM3,000 premium per annum.


He had spent RM1,800 on the purchase of books for himself and his children.

Other income:
Jeffrey had invested in a Singapore listed electronics company and received a dividend of RM9,000
for the year ended 31 December 2015.
He is also a prolific writer and has written several books on electronics related matter. His publisher
paid him royalties totaling RM15,000 in 2015.
He rented out a house in Cyberjaya for RM2,000 per month since 2010. For the year of assessment
2015, he had received a total of RM24,000 from the tenant. He took loan to acquire the property. The
monthly installment paid to the bank is RM1,500 per month (inclusive of interest RM120) to service
the loan. He paid RM250 per annum for assessment and quit rent. He also paid for repairs and
kitchen extension for RM2,000 and RM7,000 respectively.
Mrs. Pauline
Her income for the year ended 31 December 2015 was RM 76,000.
A donation of RM500 was made to the Cancer Foundation, an approved institution.

Assignment: BFN 3114 Tri 1, 2016/2017

Mrs. Pauline has a son and a daughter from her previous marriage. The son, Darryl aged 23 is
currently commencing his degree in local university. Mrs. Pauline incurred RM8,000 per annum for
his education. Her daughter from previous marriage, Diana is aged 17 and is schooling at secondary
school in Putrajaya. Upon discussion with her ex-husband, Mrs. Pauline agreed to claim 50%
children relief of both her son and her daughter. She also paid education insurance in total of
RM4,000 for Darryl and Diana.
Compute the tax payable for Mr. Jeffrey and Mrs Pauline for the year assessment 2015. Mrs. Pauline
did not elect for combined assessment.
Note: You should indicate by the use of the word nil where appropriate, any item referred to in the
question for which no adjusting entry needs to be made in the tax computation.
[50 Marks]
[Total: 100 marks]
Marks will be allocated in the appropriate instances as follows:


Description of marking criteria

Contents and structure

Application of the law
Depth and breadth of the topic discussed
Accuracy law and facts


Analytical thinking
Balanced critical thinking
Originality of thoughts
Well-developed arguments


Organized flow
Fluency and prose


Range of source
Relevancy of sources
Citation protocol
Total marks