BKAT3023 CONFIDENTIAL

MID SEM ASSESSMENT

FIRST SEMESTER 2020/2021 SESSION
COURSE CODE & NAME: BKAT3023 ADVANCED TAXATION
DATE : 20 NOVEMBER 2020 (FRIDAY)
TIME : 3.00 TO 6.00PM
LECTURERS’ NAMES : PM DR MUZAINAH MANSOR (A, B & C)
PM DR ZAINOL BIDIN (E, F & H)
DR IDAWATI IBRAHIM (D)
DR ARYATI JULIANA SULAIMAN (G & I)
LECTURERS’ GROUPS : A - I

INSTRUCTIONS:

1. This paper contains FOUR (4) questions in FIVE (5) printed pages excluding the cover
page.
2. Answer ALL the questions in the provided answer booklet which can be downloaded and
printed via UUM Online Learning. Use only WHITE PLAIN A4 paper for printing the
answer booklet.
3. Your answers should be HANDWRITTEN. Use only black or blue ink PEN, no pencils are
allowed. Write your MATRIC NO, PAGE NO and LECTURE GROUP on each answer
sheet of the booklet.
4. Kindly ORGANIZE each of your answer sheets properly according to the written PAGE
NUMBER.
5. SCAN all your answer sheets (including the cover page of the answer booklet).
6. Fill in the HONOUR PLEDGE FORM, SCAN AND SUBMIT together with your answer
sheets and submit them via the UUM Online Learning system.
7. Do the right thing when no one is looking- it’s called INTEGRITY.

ALL THE BEST

CONFIDENTIAL
 BKAT3023 ADVANCED
TAXATION

QUESTION 1 (10 MARKS: 20 MINUTES)

A. Repoh Sdn Bhd (RSB) manufactures rubber products in Jitra, Kedah. The company’s sales
turnover for the period of 1 November 2019 to 30 September 2020 was RM380,000. The
amount of sales that the company has collected in October 2020 was RM152,000.
In December 2020, RSB sold their goods to the following customer:
i. An amount of RM50,000 to AB Berhad located in Alor Setar
ii. An amount of RM30,000 to Malai Sdn Bhd located in Langkawi.
iii. An amount of RM15,000 exported to China.

REQUIRED:
(a) Determine whether RSB is a taxable person under the Sales Tax Act 2018.
(2 Marks)

(b) Determine the sales tax effect on the sale of goods by RSB in December 2020.
(3 Marks)

B. Azhar and Co (AC) provides accounting services to his clients. On 1 September 2020, AC
charged Mr. Samuel for the accounting fees of RM1,500 and RM120 for printing and
documentation.

REQUIRED:
(a) Determine the service tax amount under the Service Tax Act 2020 for the above
AC charges to Mr. Samuel.
(2 Marks)

(b) Calculate the debt due to Royal Malaysian Custom Department if AC paid the
service tax due in ‘(a)’ above on 11 February 2020.
(3 Marks)

2
QUESTION 2 (10 MARKS: 20 MINUTES)

A. Malaya International Shipping Bhd (MISB) is a resident company carrying on a business

of transporting goods by sea. The following are incomes generated for the year of
assessment 2020:

RM’000
Gross Business Income:
Malaysia 106,000
Cambodia 83,911

Net Dividend Income:

Malaysia 467
Indonesia 1,388

Gross Rental Income:

Cambodia 5,732
Yemen 2,820

Additional information:

1. Double Tax Agreement (DTA) status:

Country DTA Status
Indonesia Yes
Cambodia No
Yemen No

2. Expenses incurred for the year 2020 related to the income generated are as follows:
Item RM’000
Capital allowance 7,800
Allowable expenses related to business income 46,650
Allowable expenses related to rental income 720
Tax paid in Indonesia 519
Tax paid in Cambodia 20,978
Tax paid in Yemen 86

REQUIRED:

Compute tax liability for Malaya International Shipping Bhd (MISB) for the year of
assessment 2020 after taking into consideration the available relief for foreign tax suffered.
Advise MISB on any possibility to reduce tax liability in the future.
(8 Marks)

B. Under the e-commerce environment, computer equipment such as server could constitute
as permanent establishment (PE). However, certain activities will not constitute as PE
although server is in Malaysia. State THREE (3) activities that will not constitute PE
under the e- commerce environment and justify your answer.
(2 Marks)
QUESTION 3 (20 MARKS: 40 MINUTES)
State whether each of the following payment is subject to withholding tax. If your answer is ‘Yes’,
state the type of income, calculate the amount of withholding tax and state the due date to remit
the withholding tax to the Inland Revenue Board of Malaysia (IRBM). If ‘No’, give reason.

1. Pikabu Ltd, a non-resident company, provided personnel to supervise the installation and
operation of a plant sold to Delima Sdn Bhd (DSB), a Malaysian company. The service was
performed at the DSB branch in Melaka. On 10 August 2020, DSB paid RM80,000 to
Pikabu Ltd for the work.

2. Darina, a resident, took a loan from Jessica, a non-resident. On 5 June 2020, the interest on
the loan amounting to RM4,000 was paid by Darina to Jessica. Darina charged the interest
as an expense against her business income derived from Malaysia.

3. Betapa Sdn Bhd, entered into an agreement with Kukuda Pte Ltd, a Korean company. The
Korean company provided specialist or technical personnel to carry out trade inspection and
rectification works in Selangor for a period of four months. The fees agreed were
RM500,000 and the payment to Kukuda Pte Ltd was made on 15 April 2020.

4. KacangJaya Sdn Bhd (KJSB) made payments of RM120,000 to Chequer Ltd, a company
based in the United Kingdom, in consideration for providing testing services. The testing
services were done in the United Kingdom involved providing test results for the purposes
of certification (accreditation) of KJSB’s finished products. The payment to Chequer Ltd
was made on 20 September 2020.

5. Indika Inc is a general commission agency in Singapore which promoted sales in Singapore
on behalf of Dirgahayu Sdn Bhd, a resident company in Malaysia. Dirgahayu Sdn Bhd paid
a commission of RM90,000 on 5 July 2020 to Indika Inc based on the sales transactions
secured in Singapore. Dirgahayu Sdn Bhd obtained a copy of Indika Inc’s audited accounts
and business registration form as proof that Indika Inc is a general commission agent.

6. On 5 November 2020, Samuel was paid a royalty of RM65,000 by Elok Printing Sdn Bhd.
Samuel, a non-resident, is the writer of a book published by Elok Printing Sdn Bhd, a
resident company in Malaysia.
QUESTION 4 (20 MARKS)

A. Sayadid started a small sundry shop on 1 February 2015 and named it as Payar Store. He
closes the shop’s account every 30 September each year. On 31 January 2017, he changed
his accounting period to 31 December every year. As the business progress well, his close
friend was interested to join the business and contributed some additional funds to this
store. Eventually, he converted Payar Store into a Limited Liability Partnership on 1
December 2018 with a new accounting period ended on 30 April 2020.

REQUIRED:

Determine the basis period for Payar Store and the new Limited Liability Partnership for the
relevant years of assessment until the year of assessment 2020.
(10 Marks)

B. PKPD Sdn Bhd commenced its business on 1 March 2017 and closed its accounts on 30
November 2017. In 2018, the company decided to close its accounts on 31 October 2019.
The accounts are subsequently closed on 31 October 2019. The adjusted incomes of the
company are as follows:

Accounting periods Adjusted income (RM)

1 March 2017- 30 November 2017 783,000
1 December 2017- 31 October 2019 630,000
1 November 2019- 31 October 2020 880,000

REQUIRED:

Determine the basis periods and adjusted income of PKPD Sdn Bhd for the relevant
years of assessment up to 2020.
(10 Marks)

END OF QUESTIONS