KOLEJ UNIVERSITI TUNKU ABDUL RAHMAN

FACULTY OF ACCOUNTANCY, FINANCE AND BUSINESS

ACADEMIC YEAR 2015/2016
AUGUST/SEPTEMBER EXAMINATION
BBFT2013 TAXATION

BACHELOR OF BUSINESS (HONS) ACCOUNTING AND FINANCE

And
BACHELOR OF ACCOUNTING (HONS)

MARKING SCHEME

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Answer 4
(i)

Max 5 marks
The interest payment to George would be subject to WT since George is a non tax resident
company and the interest is deemed derived from Malaysia.
It will be deemed derived from Malaysia on the basis that the responsibility for payment of
interest lies with a tax resident company, Kursive SB (KSB) and the loan was utilised to produce
income in Malaysia.
Under Section 109(1) of the ITA, KSB is obliged to deduct a final WT of 15%
The amount of WT would be RM30,000 (15% of RM200,000)

(ii)

Max 4 marks
The royalty payment to Wywy Pte. Ltd would be subject to WT since George is a non tax resident
company and the royalty is deemed derived from Malaysia.
It will be deemed derived from Malaysia on the basis that the responsibility for payment of
interest lies with a tax resident company, Sonshine SB (SSB)
Under Section 109(1) of the ITA, SSB is obliged to deduct a final WT of 10%
The amount of WT would be RM12,000 (10% of RM120,000)

(iii)

Max 4 marks
The installation payment, a S4A Special Classes of income
would be subject to 10% WT (final tax) as it is paid to a non tax resident
and it is deemed derived from Malaysia. (the payment was made by CSB, a tax resident
The amount subject to WT is RM80K as the installation services are rendered in Malaysia.
The amount of WT would be RM8,000 (10% of RM80,000)
(max 4 marks)

(iv)

Max 3 marks
The rental of movable property constitutes a S4A Special Classes of income)
would be subject to 10% WT (final tax) as it is paid to a non tax resident
and it is deemed derived from Malaysia. (the payment was made by Kuntum SB, a tax resident)
The amount of WT would be RM4,800 (10% of RM48,000)
(max 3 marks)

Note:
If student indicates that the WT must be paid to the IRB within 1 month of payment/crediting the
payment.. (give 1 mark but only once for the Q4).
Answer 4(b)
A 10% penalty on the unpaid WT will be levied on the payer.
The upaid WT and the penalty will be a debt due to the Government.
The gross amount of payment will not be tax deductible to arrive at adjusted income.
However, the amount will be tax deductible if the upaid WT and the penalty are subsequently paid by the
due date of submission of tax return.