SUNWAY UNIVERSITY BUSINESS SCHOOL

FINAL EXAMINATION FOR THE BSc (HONS) IN ACCOUNTING AND FINANCE AND
BSc (HONS) FINANCIAL ECONOMICS

ACADEMIC SESSION : AUGUST 2021 SEMESTER

SUBJECT : ACC2054 MALAYSIAN TAXATION SYSTEM

EXAMINATION : DECEMBER 2021

TIME ALLOWED : 2 HOURS + 10 MINUTES READING TIME
TO DOWNLOAD THE QUESTION AND UPLOAD
ANSWERS

INSTRUCTIONS TO CANDIDATES

 This final examination contains four questions. You are required to ANSWER ALL FOUR
questions. This paper will be marked to maximum of 50 marks and will contribute 50% to
your final grade.
 All answers MUST BE TYPED in the ‘Answer Booklet (FE)’ (Microsoft Word file)
downloaded from Elearn. Your script will not be graded if it is not submitted using Answer
Booklet (FE)
 You are not required to prepare any reference list for submission, but if you have copied
and pasted some information directly from any source of reference without paraphrasing
(i.e., direct quote), make sure you put the quotation mark.
 If necessary, you may use Microsoft Excel worksheet to prepare your workings,
computations and tables, then copy and paste them into your answer booklet.
 You are required to submit/upload the Answer Booklet FE (Words document) to TURNITIN
for similarity check at the end of the examination session (latest by 4:10pm)
o You must NOT consult or seek assistance from any person to complete this
examination.
 In the event if you encounter any technical problems regarding the download and upload
of the examination materials, you may email the Examiner at immediate attention.

THIS EXAMINATION PAPER IS STRICTLY CONFIDENTIAL AND ONLY FOR

CANDIDATE UNDERTAKING THE FINAL EXAMINATION. UNDER NO
CIRCUMSTANCES THIS EXAMINATION PAPER SHOULD BE CIRCULATED OR
MADE AVAILABLE TO ANY OTHER PERSON.

[This paper contains FOUR questions printed on EIGHT pages, including cover page]
Sunway University Business School ACC2054/ April 2021 Examination

Additional information
(Students are required to use the following information for computation,
unless otherwise stated in the question)

Income tax rates

Resident individual
Year of Assessment 2021
Chargeable income Rate Cumulative
tax
RM % RM
First 5,000 (0 – 5,000) 0 0
Next 15,000 (5,001 – 20,000) 1 150
Next 15,000 (20,001 – 35,000) 3 600
Next 15,000 (35,001 – 50,000) 8 1,800
Next 20,000 (50,001 – 70,000) 13 4,400
Next 30,000 (70,001 – 100,000) 21 10,700
Next 150,000 (100,001 – 250,000) 24 46,700
Next 150,000 (250,001 – 400,000) 24.5 83,450
Next 200,000 (400,001- 600,000) 25 133,450
Next 400,000 (600,001 – 1,000,000) 26 237,450
Next 1,000,000 (1,000,001 – 2,000,000) 28 517,450
Exceeding 2,000,000 30

Capital allowances
Initial Rate % Annual Rate %
Industrial buildings 10 3
Industrial buildings – employees’ quarters 40 3
Plant and machinery – general 20 14
Motor vehicles and heavy machinery 20 20
Computers, information technology 20 20
equipment and computer software
Office equipment, furniture and fittings 20 10

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Sunway University Business School ACC2054/ April 2021 Examination

Personal deductions available

RM
Self 9,000
Self – additional if disabled 6,000
Spouse 4,000
Spouse – additional if disabled 5,000
Child – basic rate each 2,000
Child – higher rate each 8,000
Disabled child each 6,000
Disabled child – additional each 8,000
Life insurance premiums, approved scheme contributions maximum 7,000
- Approved provident fund i.e. EPF maximum 4,000
- Takaful or life insurance maximum 3,000
Private retirement scheme, deferred annuity premium maximum 3,000
Medical expenses for parents maximum 8,000
Parental care (each) 1,500
Medical expenses for serious disease of self, spouse or child, maximum 8,000
fertility treatment, including up to RM1,000 for each of medical
examination and vaccination.
Basic supporting equipment for self, spouse, child or parent if maximum 6,000
disabled
Medical and/or education insurance premiums for self, spouse maximum 3,000
or child
Study course fees for skills or qualifications, including RM1,000 maximum 7,000
for upskilling and self-enhancement courses.
Lifestyle allowance (Printed or electronic daily newspaper, maximum 2,500
personal computer, smartphone or tablet, internet subscription
and gymnasium membership fee)
Purchase of personal computer, smartphone or tablet maximum 2,500
Purchase of sports equipment maximum 500
Breastfeeding equipment maximum 1,000
Childcare centre and kindergarten fees maximum 3,000
Deposit for a child into the National Education Savings Scheme maximum 8,000
Contribution to Social Security Organisation (SOCSO) maximum 250
Payment for accommodation at premises registered with the maximum 1,000
Commissioner of Tourism and entrance fee to a tourist
attraction

Rebates
Individual with chargeable income not exceeding RM35,000:
Basic rate RM400
Rate for an individual entitled to a deduction for a spouse RM800
or a former wife

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Sunway University Business School ACC2054/ April 2021 Examination

Value of benefits in kind

Price of a car when new Prescribed annual value of Prescribed annual value
private usage of private petrol
(RM) (RM) (RM)
Up to 50,000 1,200 600
50,001 to 75,000 2,400 900
75,001 to 100,000 3,600 1,200
100,001 to 150,000 5,000 1,500
150,001 to 200,000 7,000 1,800
200,001 to 250,000 9,000 2,100
250,001 to 350,000 15,000 2,400
350,001 to 500,000 21,250 2,700
500,001 and above 25,000 3,000

The value of the car benefit equal to half the prescribed annual value (above) is taken
if the car provided is more than five (5) years old. Prescribed value for a driver provided
by the employer is RM600 per month.

Other benefits
RM per month
Household furnishings, apparatus and appliances
Semi-furnished with furniture in the lounge, dining room 70
or bedroom
Semi-furnished with furniture as above plus air-conditioners 140
and/or curtains and carpets
Fully furnished premises 280
Domestic helper 400
Gardener 300
Guard 400

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Sunway University Business School ACC2054/ April 2021 Examination

Answer All Questions

Question 1 (Total: 15 marks)

Mikaela came to Malaysia for the first time in the year 2015, below is her record of
stay in Malaysia:

Year In Malaysia
2015 15 November to 25 November
1 December to 31 December
2016 28 June to 30 August
9 December to 31 December
2017 1 January to 5 June
25 June to 31 July
2018 12 November to 29 December
2019 5 January to 26 July
2020 11 May to 20 May
2021 10 Mar to 30 April
18 July to 31 August

Note

2017
From 6 June 2017 to 24 June 2017 (both dates inclusive), Mikaela visited the United
States to be with her brother who was ill.

2018 to 2019
From 30 December 2018 to 4 January 2019 (both dates inclusive), Mikaela attended
a seminar in Singapore.

Required:
Determine the residence status of Mikaela for each of the years of assessment from
2015 to 2021.

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Sunway University Business School ACC2054/ April 2021 Examination

Question 2 (Total: 15 marks)

Southern Chemical Sdn Bhd (SC) is pharmaceutical manufacturer, it has the

following assets:

a) SC has the following items in its office:

RM
Printer 4,000
Office desk (10 units) 5,000
Office chair (10 units) 3,000
Movable partition 5,500
Non-movable partition 12,300

The printer was recorded as an expense in the statement of profit or loss, the
other items were recorded in PPE.

b) SC leased a tablet counting machine at a yearly lease of RM 15,000 for three

years (cost of machine RM 45,000) and it incurred expenditure amounting to
RM 4,500 in preparing and leveling land to prepare a site for the installation
of the tablet counting machine.

c) SC constructed 2 buildings within the area of its manufacturing plant as

follows:
(i) A building for the living accommodation of the factory workers
(ii) A building which houses the office

Required:
Discuss the tax treatment for each type of the above according to Schedule 3 of
Income Tax Act 1967 (Capital Allowances and Charges), NO computation of capital
allowance is required.

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Sunway University Business School ACC2054/ April 2021 Examination

Question 3 (Total: 9 marks)

Manufacture Hub Sdn Bhd (MSSB) is a manufacturer registered under Sales Tax Act
2018 and manufactures taxable goods in Malaysia.

One of the raw materials used by MSSB was imported from overseas. On 1 March
2021, MSSB imported goods from Thailand as follows:

Purchase price RM 119,000

Insurance RM 27,300
Freight RM 13,300
Import duty 20%
Sales tax 10%

Sales tax was paid on the same day during clearance of goods.

On 30 April 2021, 50% of the goods were exported at a sales value of RM 71,400.
MSSB has made a declaration in the export declaration form that drawback would be
claimed.

Required:
a) Explain, with reasons, when is the last day for MSSB to apply for drawback of
sales tax, and whether MSSB is eligible to apply for drawback if it exported the
raw materials on 12 December 2021. (3 marks)
b) Compute the amount of drawback claimable by MSSB in respect of the exported
goods.
Indicate ‘nil’ in the appropriate column for any item that does not require
adjustment in your tax computation. (6 marks)

Question 4 (Total: 11 marks)

a) OCC Sdn Bhd (OCC) is a subcontractor in the oil and gas industry. During the
year 2021, OCC has 10 ongoing contracts, however, the customer of the major
contract terminated the contract prematurely. The terminated contract contributes
to 80% of the annual revenue of OCC, and still has a contract term of 3 years. The
client made a compensation of RM 20million to OCC for the early termination.

Required:
Discuss the taxability of the compensation received by OCC. (6 marks)

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Sunway University Business School ACC2054/ April 2021 Examination

b) Martha is an Australian and has been working as an engineer for OCC Sdn Bhd
in Malaysia for a few years. Her contract ends on 28 February 2022, she utilised
all her accumulated annual leave before the end of her contract and moved back
permanently to Australia on 31 December 2021.

Her income is as follows:

RM
Salary 10,000 per month
Travelling allowance 1,000 per month

Martha was only entitled to the travelling allowance if she carries out her duties in
that month.

OCC purchased a new car worth RM 70,000 to be used for her official duties with
no fuel provided.

She stayed in a semi-furnished house (equipped with air-conditioner) rented by

the company until she left Malaysia. The house was rented at a monthly rent of
RM 4,300, of which, RM 300 was for the furnishing.

During the year 2021, Martha incurred a total travelling expense of RM 1,500
because she needed to travel between multiple petroleum refinery plants. All
receipts for travel were properly kept.

Required:
Compute the employment income for Martha for the year of assessment 2021,
DTA is to be disregarded. (5 marks)

~ END OF PAPER ~