Tax Planning – Individual

1. John McBride arrived in Malaysia on 1 April 2015 to take up a one year

local employment with Asia plus Berhad. He was accompanied by his wife
but not his three children [under age of 18] who remained behind in
Denmark to continue with their schooling.

Details of his one year remuneration up to 31 March 2016 are as follows:-

RM
Salary 300,000
Benefits in kind 18,000

John McBride has made no overseas trips during his period of employment
but he has booked flight for a social visit to Denmark on 18 December 2015
with intention of returning on 4 January 2016.

Required:

a. What would be the tax payable by John McBride for YA 2015 and
YA2016 assuming there is no change in tax legislation for YA2016?
b. Advise John McBride on any alternative that could reduce his tax
liabilities for YA2016.
2. Mr. Brown, a bachelor is posted to Malaysia as a technical director of
consultants Sdn Bhd. His total remuneration for YA2018 is RM180, 000 in
cash with no other benefits.
Mr. Brown is advised by his consultants to restructure his remuneration
package with the following elements which are agreeable to his employer.

RM
Salary 102,000
EPF @19% 19,380
Accommodation –Unfurnished Portion 36,000
Accommodation-Furnished Portion 12,000
Car provided[cost RM80,000] *
*Balance of RM10, 620 estimated to be cost of maintaining of a car
provided.

Required:

Computed amount of tax savings by the restructure remuneration package.

3. Jason, who is from Western Hampshire, joined your company in 2018 as the
new General Manager. He is single person is on a 3 year contract with the
company after it is expected that a local person would then have groomed to
take over.

The total agreed package is RM300,000 per annum[payable to him in cash

with no benefits in kind] Jason has made his own calculations as to his net
after tax income, after meeting his tax payable and his basic needs such as
housing, car and home leave passage. He provided you with the following
computation:

RM
Gross Income 300,000
Less: Tax payable (70,955)
Apartment Rental (42,000)
Rental of furnishings (12,000)
Car Installments (30,000)
Leave passage (5,000)
Net Income 140,045
He has informed you that all he needs after the basic expenses listed above
RM8, 900 per month. He would like the Company to provide him with some
benefits in kind so as to minimize his tax liabilities.

Required:

Suggest a revised remuneration package for Jason to meet his requirement.

You may make reasonable assumptions. You may take the value of
furnishing to be RM3,380 per annum and the benefits in kind in respect of a
car costing RM130,000 to be RM6,500 per annum.
4. Mr. Ranjit, a successful Malaysian businessman, believes that he can make
at least RM200, 000 per annum over the next five (5) years. He is married
with four (4) children. Ranjit being the only child will continue looking after
his elderly parents.

Required:

Advise Ranjit the advantages of carrying on his business by way of a

company than a sole-trader.