Taxation

(Malaysia)
Specimen Exam applicable from
December 2015

Time allowed
Reading and planning:
Writing:

15 minutes
3 hours

This question paper is divided into two sections:

Section A ALL 15 questions are compulsory and MUST be attempted
Section B ALL SIX questions are compulsory and MUST be attempted
Rates of tax and tables are printed on pages 24.
Do NOT open this question paper until instructed by the supervisor.
During reading and planning time only the question paper may be
annotated. You must NOT write in your answer booklet until instructed
by the supervisor.
Do NOT record any of your answers on the question paper.
This question paper must not be removed from the examination hall.

The Association of Chartered Certified Accountants

Paper F6 (MYS)

Fundamentals Level Skills Module

SUPPLEMENTARY INSTRUCTIONS
1.
2.
3.

Calculations and workings should be made to the nearest RM.

All apportionments should be made to the nearest whole month.
All workings should be shown in Section B.

TAX RATES AND ALLOWANCES

The following tax rates, allowances and values are to be used in answering the questions.
Income tax rates
Resident individuals
Chargeable income
First
Next
Next
Next
Next
Next
Next
Next
Exceeding

RM
5,000
15,000
15,000
15,000
20,000
30,000
150,000
150,000
400,000

Rate
%
0
1
5
10
16
21
24
245
25

RM
(0 5,000)
(5,001 20,000)
(20,001 35,000)
(35,001 50,000)
(50,001 70,000)
(70,001 100,000)
(100,001 250,000)
(250,001 400,000)

Resident company
Paid-up ordinary share capital

First
RM500,000
20%
25%

RM2,500,000 or less
More than RM2,500,000
Non-residents
Company
Individual

Cumulative tax
RM
0
150
900
2,400
5,600
11,900
47,900
84,650

Excess over
RM500,000
25%
25%

25%
25%

Personal reliefs and allowances

Self
Disabled self, additional
Medical expenses expended on parents
Medical expenses expended on self, spouse or child with serious disease,
including up to RM500 for medical examination
Basic supporting equipment for disabled self, spouse, child or parent
Purchase of sports equipment
Study course fees for skills or qualifications
Expenses on books for personal use
Spouse relief
Disabled spouse, additional
Child basic rate
Child higher rate
Disabled child
Disabled child, additional
Life insurance premiums and contributions to approved funds
Private retirement scheme contributions, deferred annuity premiums
Medical and/or education insurance premiums for self, spouse or child
Purchase of a personal computer
Deposit for a child into the National Education Savings Scheme

(maximum)
(maximum)
(maximum)
(maximum)
(maximum)
(maximum)

(each)
(each)
(each)
(each)
(maximum)
(maximum)
(maximum)
(maximum)
(maximum)

RM
9,000
6,000
5,000
6,000
6,000
300
5,000
1,000
3,000
3,500
1,000
6,000
6,000
6,000
6,000
3,000
3,000
3,000
6,000

Rebates
Chargeable income not exceeding RM35,000
Individual basic rate
Individual entitled to a deduction in respect of a spouse or a former wife

RM
400
800

Value of benefits in kind

Car and fuel scale
Cost of car
(when new)
RM
Up to
50,000
50,001
to
75,000
75,001
to 100,000
100,001 to 150,000
150,001 to 200,000
200,001 to 250,000
250,001 to 350,000
350,001 to 500,000
500,001 and above

Prescribed annual value of

private usage of car
RM
1,200
2,400
3,600
5,000
7,000
9,000
15,000
21,250
25,000

Prescribed annual value of

private petrol
RM
600
900
1,200
1,500
1,800
2,100
2,400
2,700
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.
Where a driver is provided by the employer, the value of the benefit is fixed at RM600 per month.

Other benefits
RM per month
Household furnishings, apparatus and appliances
Semi-furnished with furniture in the lounge, dining room or bedroom
Semi-furnished with furniture as above plus air-conditioners and/or curtains and carpets
Fully furnished premises

70
140
280

Domestic help
Gardener

400
300

Capital allowances

Industrial buildings
Plant and machinery general
Motor vehicles and heavy machinery
Office equipment, furniture and fittings
Agriculture allowance
Buildings for the welfare of or as living accommodation for farm employees
Other buildings used in the business
All other qualifying agricultural expenditure

Initial
allowance
(IA)
Rate %
10
20
20
20

Annual
allowance
(AA)
Rate %
3
14
20
10

nil
nil
nil

20
10
50

[P.T.O.

Real property gains tax

Individuals
(citizens and
permanent
residents)
Rate
%

Individuals
(non-citizens)

All
other
persons

Rate
%

Rate
%

30
20
15
0

30
30
30
5

30
20
15
5

Date of disposal
Disposal within three years after the date of acquisition
Disposal in the fourth year after the date of acquisition
Disposal in the fifth year after the date of acquisition
Disposal in the sixth year after the date of acquisition or thereafter

Goods and services tax (GST)

Standard rate
Registration limit

6%
RM500,000

Section A ALL 15 questions are compulsory and MUST be attempted

Please use the grid provided on page two of the Candidate Answer Booklet to record your answers to each multiple
choice question. Do not write out the answers to the MCQs on the lined pages of the answer booklet.
Each question is worth 2 marks.
1

Marker Sdn Bhd incurred the following expenses during the year of assessment 2015:

Entertainment of suppliers
Leave passage for a director for a local trip
Sponsorship of arts and cultural activity (approved) performed by local artistes

RM10,000
RM10,000
RM510,000

What is the total amount of expense which will be DISALLOWED when calculating Marker Sdn Bhds adjusted
income for the year of assessment 2015?
A
B
C
D

RM530,000
RM25,000
RM30,000
RM520,000

Bangles Sdn Bhd makes up its accounts to 31 December and is required to calculate its initial estimate of tax payable
for the year of assessment 2015. Bangles Sdn Bhds estimate of tax payable for the year of assessment 2014 was
RM100,000. The companys draft tax computation for the year of assessment 2015 showed estimated income tax
payable of RM62,000.
What is the minimum estimate of tax payable which can be submitted by Bangles Sdn Bhd for the year of
assessment 2015?
A
B
C
D

RM62,000
RM85,000
RM100,000
RM52,700

Eco-Land Sdn Bhd acquired a shop lot for investment and letting purposes.
Under which of the following scenarios will the rental income be assessed as a business source of income?
A
B
C
D

Eco-Land
Eco-Land
Eco-Land
Eco-Land

Sdn
Sdn
Sdn
Sdn

Bhd
Bhd
Bhd
Bhd

owns another three properties which it also lets out

owns only commercial properties
actively advertises the space for rental
actively provides comprehensive maintenance or support/ancillary services

Jack and Zila are in partnership and share their profits equally. The results of the partnership for the year of
assessment 2015 are as follows:

Provisional adjusted income

Jack and Zilas salaries (RM30,000 each)
Jacks family trip expenses

RM90,000
RM60,000
RM5,000

What is Jacks statutory income from the partnership for the year of assessment 2015?
A
B
C
D

RM42,500
RM55,000
RM60,000
RM47,500

[P.T.O.

Ought Inc entered into a contract with Boleh Sdn Bhd to provide technical services for a period of ten days for
RM100,000. During the ten-day period, Ought Incs staff performed services in Malaysia for two days and spent the
remaining eight days working in the UK office. Boleh Sdn Bhd remitted the RM100,000 on 15 April 2015.
What is the amount of withholding tax, if any, which should have been remitted by Boleh Sdn Bhd to the Inland
Revenue Board?
A
B
C
D

RM10,000
RM8,000
RM2,000
RM0

Mr Bale owns an apartment which he rents out to tenants. During the year of assessment 2015, his gross income
from rental sources was RM62,000 which included a refundable deposit of RM2,000. The expenses incurred during
the year were quit rent and assessment of RM1,500 and installation costs of RM3,000 for two new air-conditioners
for the apartment (at the request of the tenants). The air-conditioners were installed for the first time in the apartment.
What is Mr Bales statutory income from rental sources for the year of assessment 2015?
A
B
C
D

RM58,500
RM55,500
RM60,500
RM57,500

Nik is Malaysian tax resident and is employed by ABC Sdn Bhd.

Nik received interest income on 1 March 2015 from fixed deposits which were placed with a local bank. Nik also
received dividends from a company listed on the Hong Kong Stock Exchange and insurance proceeds from an
endowment policy.
In relation to Niks liability to Malaysian income tax, which of the following statements is/are correct?

(1)
(2)
(3)
(4)

The
The
The
The

employment income is subject to income tax

interest income derived from fixed deposits with a local bank is subject to income tax
dividend income received from the Hong Kong listed company is tax exempt
insurance proceeds received from the endowment policy are tax exempt

A
B
C
D

1 and 2 only
3 only
1, 3 and 4 only
1, 2, 3 and 4

HTR Sdn Bhd is not currently registered for goods and services tax (GST) but is monitoring the threshold to determine
whether it will be required to register. HTR Sdn Bhd enters into the following categories of transaction:
(1)
(2)
(3)
(4)

Sales of standard rated supplies

Sales of zero rated supplies
Sales of capital assets
Rental of commercial premises

Which of the above categories of supply should be taken into account by HTR Sdn Bhd in determining whether
it has exceeded the GST registration threshold?
A
B
C
D

1, 2 and 4 only
3 and 4 only
1 and 2 only
1, 2, 3 and 4
6

Akash works full time as a pilot and writes books on a part-time basis. Akash wrote a book and received royalty
income amounting to RM42,000 in the year of assessment 2015.
What is the amount of royalty income which is assessable to tax on Akash for the year of assessment 2015?
A
B
C
D

RM22,000
RM42,000
RM32,000
RM30,000

10 Lai Yin Sdn Bhd donated cash of RM1,000 and computers worth RM9,000 to Tawau Orphanage, an approved
Malaysian charitable organisation. Lai Yin Sdn Bhds statutory income from business operations was RM2,500 for
the year of assessment 2015. Lai Yin Sdn Bhd also had interest income of RM2,500 for the year of assessment 2015.
What is the tax deduction in respect of donations which can be claimed by Lai Yin Sdn Bhd for the year of
assessment 2015?
A
B
C
D

RM350
RM1,000
RM700
RM500

11 Meena, a Malaysian citizen, acquired an apartment on 10 April 2010 and disposed of it on 13 September 2013
generating an allowable loss of RM12,500 on the disposal.
Meena acquired an office unit on 12 December 2012 for RM300,000 and disposed of it on 16 November 2015 for
proceeds of RM340,000. She had incurred stamp duty of RM1,500 on the acquisition of the office unit.
The properties were held for investment purposes.
What is Meenas gain subject to real property gains tax in respect of the disposal of the office unit?
A
B
C
D

RM40,000
RM16,000
RM38,500
RM28,500

12 TSG Sdn Bhd made the following payments in January 2015:

Interest of RM10,000 to its parent company in Canada

Royalty of RM20,000 to a local franchise holder
Purchase of equipment for RM30,000 from a supplier in Canada
Rental of crane for RM40,000 from a local supplier in Malaysia

What is the amount of withholding tax on the payments made in January 2015 which should be remitted by
TSG Sdn Bhd to the Inland Revenue Board?
A
B
C
D

RM3,000
RM10,000
RM3,500
RM4,500

[P.T.O.

13 ZAP Supermarket Sdn Bhd is a retailer who is registered for goods and services tax (GST). The company recorded the
following information in relation to invoices issued to customers in December 2015. All amounts are stated exclusive
of GST:
Local sales cash
Local sales credit
Export sales credit

RM
10 million
11 million
2 million

ZAP Supermarket Sdn Bhd offers its customers 30 days of credit. Therefore, payment in respect of the December
2015 credit sales (both to local customers and exports) was received in January 2016.
What is the output tax payable by ZAP Supermarket Sdn Bhd for the month of December 2015?
A
B
C
D

RM1,380,000
RM660,000
RM1,260,000
RM600,000

14 Fajar Sdn Bhd, a manufacturing company with an issued share capital of RM20 million, owned an acre of land which
it acquired for RM1,000,000 in 2013.
The government compulsorily acquired the land and paid Fajar Sdn Bhd compensation of RM1,200,000 under a sale
and purchase agreement.
What are the real property gains tax (RPGT) implications of the above transaction for Fajar Sdn Bhd?
A
B
C
D

Fajar Sdn Bhd will not be subject to RPGT nor be required to submit a RPGT return to the Inland Revenue Board
(IRB) as the compulsory acquisition by the government will be treated as a no-gain no-loss transaction
Fajar Sdn Bhd will be subject to RPGT and must submit a RPGT return to the IRB within 30 days from the date
of signing the sale and purchase agreement
Fajar Sdn Bhd will be subject to RPGT and must submit a RPGT return to the IRB within 60 days from the date
of signing the sale and purchase agreement
Fajar Sdn Bhd will not be subject to RPGT as the compulsory acquisition by the government will be treated as a
no-gain no-loss transaction but it must still submit a RPGT return to the IRB

15 Pole Sdn Bhd makes up its accounts annually to 31 December. On 1 July 2014, the company acquired a passenger
vehicle for the production manager under a hire purchase agreement.
Details of the asset acquired under the hire purchase agreement are as follows:
Cash price of the passenger vehicle
Deposit paid during the year of assessment 2014
Capital portion of instalments paid during 2014
Interest portion of instalments paid during 2014
Capital portion of instalments paid during 2015
Interest portion of instalments paid during 2015

RM
305,000
40,000
70,000
5,000
100,000
10,000

What is the amount of capital allowances claimable by Pole Sdn Bhd in respect of the above asset for the year
of assessment 2015?
A
B
C
D

RM20,000
RM10,000
RM22,000
RM61,000
(30 marks)

Section B ALL SIX questions are compulsory and MUST be attempted

Please write your answers to all parts of these questions on the lined pages within the Candidate Answer Booklet.
1

Oxygen Sdn Bhd (OSB) is a manufacturer of digital products based in Kuala Lumpur, which makes up its accounts
annually to 30 June.
Details of the non-current assets acquired by OSB in the basis period for the year of assessment 2014 are shown
below:
Asset description

Qualifying expenditure
RM
1,000,000
60,000

(i) Factory building

(ii) Various items of office equipment

The office equipment was all acquired on 6 January 2014. On 20 April 2015, one of the items of equipment, which
had cost RM10,000, was damaged in a fire and it was written off for commercial reasons. There was no insurance
coverage for the asset damaged.
During the board of directors meeting on 2 June 2015, it was determined that there was an increase in demand for
OSBs products in Malaysia and the finance manager was instructed to look into constructing a storage warehouse
exclusively for the Malaysian market. He is considering the following two options:
Option 1 To construct a warehouse within the curtilage of the current factory premises.
Option 2 To construct a warehouse 20 kilometres away in Port Klang, Malaysia.
Required:
(a) Compute the residual expenditure and balancing charge or balancing allowance on the office equipment
written off during the year of assessment 2015 and determine the balance of qualifying plant expenditure
and residual expenditure for the remaining office equipment carried forward to the year of assessment 2016.
Note: You should assume that the provisions of Paragraph 71 of the Income Tax Act 1967 are NOT applicable
and therefore no claw back of capital allowances claimed for the assets disposed of within two years of
acquisition will be made.
(5 marks)
(b) Compute the industrial building allowance for the years of assessment 2014 and 2015 for the factory
building and the residual expenditure carried forward to the year of assessment 2016.
(2 marks)
(c) Explain the income tax implications of each of the two options for the construction of the warehouse from
the perspective of claiming industrial building allowance and advise which would be more tax efficient.
(3 marks)
(10 marks)

[P.T.O.

(a) (i)

Explain the responsibilities of Malaysian companies both existing companies and new companies for
the assessment, estimation and payment of tax liabilities, and the submission of tax returns under the
self-assessment system.
(6 marks)

(ii) Explain if there are any exceptions to the self-assessment responsibilities outlined in (i) for new
companies with a paid-up share capital of less than RM2,500,000.
(2 marks)
(b) SOS Bhd makes up its accounts to 31 December annually. The company estimated its tax payable for the year
of assessment 2015 as RM100,000 and paid monthly instalments to the Inland Revenue Board (IRB) in
accordance with this estimate.
SOS Bhd submitted its tax return for the year of assessment 2015 to the IRB by the due filing date. The tax return
showed a final tax liability of RM180,000.
Required:
Compute the penalty payable by SOS Bhd in respect of the underestimation of its tax for the year of
assessment 2015.
(2 marks)
(10 marks)

On 12 January 2010, Esther acquired a piece of land for RM2,000,000, paying stamp duty of RM30,000 and
professional fees of RM20,000. On 1 March 2012, Esther transferred the land to her husband, Yee, without any
valuable consideration.
Yee immediately built a storage building for RM490,000 on the piece of land.
In September 2012, Yee received an offer from Acre Sdn Bhd to acquire the piece of land and received a deposit of
RM10,000. Acre Sdn Bhd subsequently decided not to pursue the acquisition and the deposit was forfeited to Yee.
On 6 February 2015, Yee disposed of the piece of land for RM3,500,000 to Zen Sdn Bhd. Yee incurred RM9,000
on valuation fees and RM1,000 on legal fees in relation to the disposal of the land.
Required:
(a) Explain the real property gains tax implication of the gift of land from Esther to Yee on 1 March 2012.
(3 marks)
(b) Compute the gain subject to real property gains tax (RPGT) arising from the disposal of the land by Yee to
Zen Sdn Bhd on 6 February 2015. Clearly identify the disposal price and the acquisition price.
Notes:
1. You are NOT required to compute the real property gains tax.
2. You should indicate by the use of the word nil any item referred to in the question for which no adjusting
entry needs to be made in the tax computation.
(7 marks)
(10 marks)

10

CBP Sdn Bhd, is in the business of manufacturing tiles and has an annual sales turnover of RM10,000,000.
CBP Sdn Bhd is registered for goods and services tax (GST).
CBP Sdn Bhd recorded the following transactions in the period 1 September 2015 to 30 September 2015. All
supplies are stated exclusive of GST and all purchases/acquisitions are stated inclusive of GST:
Supplies
Sales of tiles to GST registered businesses
Sales of tiles to non-GST registrants
Sales of scrap tiles (damaged inventory) to GST registered businesses

RM
600,000
10,000
1,000

Purchases/acquisitions
RM
10,600
212,000
5,300
1,060

Conference table
Inventory (stock) of raw clay
Medical treatment of staff at AA Hospital
Entertainment of staff at Hotel K
Required:

(a) State CBP Sdn Bhds relevant taxable period for GST purposes and the deadline for CBP Sdn Bhd to submit
its GST return for this period.
(2 marks)
(b) Compute the net GST payable by CBP Sdn Bhd. Clearly identify both the output tax payable and the input
tax recoverable and any amounts in respect of which input tax is not claimable (blocked).
(8 marks)
(10 marks)

11

[P.T.O.

Space Tech Bhd (STB), a company with an issued share capital of RM10 million, makes up its accounts annually to
30 September. STB is in the business of manufacturing telecommunication equipment for both the local Malaysian
market and for export.
The statement of profit or loss of STB for the financial year ended 30 September 2015 is as follows:
Note
Sales
Less: Cost of sales

Gross profit
Add: Other income
Gain on disposal of vacant land
Interest income

RM000s

RM000s
24,000
(18,000)

6,000

500
30

530

6,530

Less: Expenses
Contributions
Donations to unapproved institutions
Foreign exchange gain
Statutory audit fees
Marketing expenses
Motor vehicle expenses
Salaries and allowances
Sundry expenses

3
4
5
6
7
8

21
32
(115)
65
500
195
3,709
1

(4,408)

2,122

Profit before tax

Notes:

(1) The cost of sales includes obsolete inventories written off of RM36,000 and depreciation of plant, property and
equipment of RM2,350,000.
(2) The interest income arose on a loan advanced to a subsidiary.
(3) Contributions comprise:
RM
Expenditure relating to the companys social responsibility by building a
bus stop for the public (STB received all necessary approvals)
Scholarship expenses for a Malaysian student to study for a degree at a
local university registered with the relevant Ministry (the student was a
full-time student and their parents monthly income was RM4,500 per month)
Cash sponsorship of a customers annual dinner

10,000

6,000
5,000

21,000

(4) The foreign exchange gain comprises:

Foreign exchange loss realised on the disposal of investments
Foreign exchange gain from export sales (unrealised)

12

RM
35,000
(150,000)

(115,000)

(5) Marketing expenses comprise:

RM
Expenses for maintaining a overseas sales office for the promotion of exports
to the Vietnam market

500,000

(6) Motor vehicle expenses include the following lease rentals:

Chief marketing officers car (non-commercial)

Van (commercial)

Cost
RM
305,000
165,000

Year of assessment
2014
2015
RM
RM
110,000
110,000
60,000
60,000

(7) Salaries and allowances include allowances of RM40,000 paid to the sales and marketing team to defray
expenses incurred to entertain customers and RM4,000 of overseas leave passage for a director.
(8) Sundry expenses comprise:
RM
1,000

Annual general meeting (AGM) expenses

(9) The capital allowances have been computed at RM1,300,000 for the year of assessment 2015.
Required:
(a) Compute Space Tech Bhds chargeable income for the year of assessment 2015.
Note: You should start your computation with the profit before tax figure of RM2,122,000 and indicate by the
use of the word nil any item referred to in the question for which no adjusting entry needs to be made in the
tax computation.
(13 marks)
(b) STB is considering the acquisition of proprietary rights to a patented industrial design to improve its
manufacturing technology processes.
STB has heard that a special tax deduction of 20% (over five years) should be available in respect of the purchase
of proprietary rights, provided certain conditions are met.
Required:
State the conditions which must be met before a company can claim a special deduction for the cost of the
acquisition of proprietary rights.
(2 marks)
(15 marks)

13

[P.T.O.

Spitz, a Malaysian resident, married Ono, a Japanese citizen, on 21 August 2015. Ono had arrived in Malaysia for
the first time on 1 August 2015 and started employment as a fashion model in Malaysia from 2 September 2015.
Spitz has operated a caf business but after several years of losses he decided to shut down this business on
31 October 2015.
For the last two years Spitz has also been employed as an airline pilot by Aeroclass Airlines, but he will cease this
employment with effect from 1 January 2016 and his last day of employment will be 31 December 2015.
Spitz has decided to move to Japan with Ono. Ono has also tendered her resignation and her last day of employment
will also be 31 December 2015. The couple do not expect to return to Malaysia for at least three years. Both Spitz
and Ono will leave Malaysia for Japan on 5 January 2016.
Details of Spitzs income, benefits and expenditures for the year ended 31 December 2015 are shown below.
Spitzs caf business for the period ended 31 October 2015:
RM
500

Profit before taxation

In arriving at the above the following were included:
(i) Depreciation
(ii) Gain on disposal of non-current assets

(3,506)
26,966

Spitzs employment income and benefits-in-kind for the year 2015:

Salary
Bonus
Service excellence award (cash)
Fully furnished living accommodation. Aeroclass Airlines paid a monthly
rental of RM12,500 per month for the accommodation which included
RM2,500 for the furniture
Domestic servant provided for the whole year (hired and paid for by
Aeroclass Airlines)

RM
240,000
40,000
2,500

150,000
12,000

Spitz incurred the following expenditure in 2015:

Employees provident fund contribution
A contribution-in-kind donation to a project of national interest approved
by the Minister, equivalent to:

RM
30,800
55,650

Spitz is fluent in several languages. In 2015, he received royalties of RM22,000 from the Ministry of Education for
the translation of a German book on airline safety for use in local colleges and universities.
Required:
(a) Assuming Spitz and Ono do not elect for combined assessment for income tax, compute the chargeable
income of Spitz for the year of assessment 2015.
Note: You should indicate by the use of the word nil or exempt, where appropriate, any item referred to in
the question for which no adjusting entry needs to be made in the tax computation.
(13 marks)
(b) State, giving reasons, whether Ono is tax resident in Malaysia for the year of assessment 2015. (2 marks)
(15 marks)

End of Question Paper

14

Answers

Fundamentals Level Skills Module, Paper F6 (MYS)

Taxation (Malaysia)

Specimen Exam Answers

and Marking Scheme

Section A
1

B
(50% x RM10,000) + RM10,000+ (RM510,000 RM500,000) = RM25,000

B
Tutorial note: Companies must furnish estimates of tax payable for a year of assessment which are not less than
85% of the estimates or revised estimates of tax payable for the prior year of assessment.

D
Divisible income = RM90,000 RM60,000 RM5,000 = RM25,000
Jack = RM30,000 + RM5,000 + (RM25,000/2) = RM47,500

C
RM100,000 x 2 days/10 days = RM20,000 x 10% = RM2,000

A
(RM62,000 RM2,000) RM1,500 = RM58,500

A
Tutorial note: The determination of taxable turnover for GST registration purposes includes all taxable supplies
but specifically excludes disposals of capital assets.

A
RM
42,000
(20,000)

22,000

Royalty income
Less: Exemption (use of literary work)

10 D
RM2,500 + RM2,500 = RM5,000 x 10% restriction = RM500

11 B
RM
Disposal consideration
Acquisition cost
Add: Stamp duty

RM
340,000

300,000
1,500

Chargeable gain (CG)

Less: Schedule 4 exemption (higher of 10% of CG or RM10,000)
Less: Allowable loss (apartment)
Gain subject to RPGT

17

(301,500)

38,500
(10,000)
(12,500)

16,000

Marks
12 C
(RM10,000 x 15%) + (RM20,000 x 10%) = RM3,500

13 C
(RM10 million + RM11 million) x 6% = RM1,260,000

14 D

15 B
CA for YA 2015 QPE = RM50,000 x 20% = RM10,000
2 marks each

18

30

Section B
1

(a)

Marks
Oxygen Sdn Bhd Capital allowances
Office equipment
RM
Qualifying expenditure office equipment
YA 2014
Initial allowance (IA) (20%)
Annual allowance (AA) (10%)

RM
60,000

30% allowances claimed in year of assessment (YA) 2014

YA 2015
Assets written off balancing adjustment
Cost of asset written off

10,000

RE RM10,000 (100% 30%)

Disposal proceeds

7,000
0

7,000

Balancing allowance
Qualifying plant expenditure
Less: Disposal assets written off

60,000
(10,000)

50,000
35,000

Qualifying plant expenditure

RE (100% 30%)
YA 2015
AA (10%) [50,000 x 10%]

(5,000)

30,000

RE carried forward to YA 2016

(b)

Factory building
RM
Qualifying building expenditure
YA 2014
Initial allowance (IA) (10%)
Annual allowance (AA) (3%)

100,000
30,000

Residual expenditure (RE)

YA 2015
Annual allowance (AA) (3%)

RM
1,000,000

(130,000)

870,000
(30,000)

840,000

RE carried forward to YA 2016

(c)

Option 1: the warehouse building would be eligible for industrial building allowance (IBA) as the warehouse
is within the curtilage of the factory building.

Option 2: the warehouse building will not be within the curtilage of a factory building and is not to be used
exclusively for the storage of goods for export or for the storage of goods to be imported, processed and
re-exported. As such it will not be eligible for IBA.

Therefore, option 1 would be more tax efficient as the warehouse building would be eligible for IBA.

19

10

Marks
2

(a)

(i)

Self-assessment system for companies

Existing companies
Under the self-assessment system in Malaysia, a taxpayer company:
(i)

has to compute and assess its own tax liability: the tax payable as per the tax return is a deemed
assessment and is deemed agreed;

(ii)

has to furnish an estimate of income tax payable no later than 30 days before the beginning of
the basis period;

(iii) is allowed to revise its tax estimate in the sixth month and/or ninth month of the basis period;
(iv) is required to pay the estimated amount of income tax payable to the Inland Revenue Board (IRB)
in equal monthly instalments by the 15th day of the month, beginning from the second month of
the relevant basis period;
(v)

has to submit its tax returns within seven months from the close of its accounting year;

(vi) has to settle any balance of income tax payable or on before the last day of the seventh month
following the close of the accounting year;
(vii) is subject to the penalty regime for non-compliance of due dates or underestimation of tax.
New companies
Under the self-assessment system in Malaysia, a taxpayer company which commences business in a
year of assessment:
(viii) is required to furnish an estimate of income tax payable within three months from the date of
commencement of its operations.
(ix) has to commence its monthly instalment payments in the sixth month of the relevant basis period.
SIX items only required, 1 mark each, maximum

Marking note: Credit will also be given for any other acceptable factors not shown above.
(ii)

Exception for new SME companies

A new company with a paid-up share capital of RM2,500,000 and below is not required to furnish an
estimate of income tax payable and not required to pay income tax payable in monthly instalments for
the year of assessment in which it commences and the following year of assessment. To benefit from
this exception, the company must not be part of a group of companies which includes a company with
a paid-up share capital of more than RM2,500,000.

(b)

Penalty for the underestimate of tax

RM
180,000
100,000

80,000
(54,000)

26,000

2,600

Final tax payable

Estimated tax
Difference
Less: 30% of final tax (30% of 180,000)
Excess subject to penalty
Penalty at 10%

10

Esther and Yee Real property gains tax (RPGT)

(a)

Esther Gift of land to Yee

The transfer of real property as a gift between parent and child, grandparent and grandchild, or husband and
wife is treated as at no gain no loss.

Therefore, there will be no real property gains tax payable by Esther on the gift she made to her husband,
Yee.

The acquisition price of the property for Yee will be the acquisition price incurred by the donor, Esther, and
any permitted expenses incurred by Esther.

20

Marks
(b)

Yee Gain subject to real property gains tax (RPGT) on disposal of the land
RM
Disposal consideration
Less: Permitted expenses
Enhancement costs (storage building)
Incidental costs (9,000 + 1,000)

(490,000)
(10,000)

3,000,000

Disposal price
Acquisition consideration
Add: Stamp duty
Professional fees
Less: Deposit forfeited

2,000,000
30,000
20,000
(10,000)

Acquisition price
Chargeable gain (CG)
Less: Schedule 4 exemption higher of 10% of CG or RM10,000
Gain subject to RPGT

RM
3,500,000

1
1
1
1

(2,040,000)

960,000
(96,000)

864,000

10

CBP Sdn Bhd

(a)

As CBP Sdn Bhd has annual sales turnover in excess of RM5,000,000, it should submit its goods and
services tax (GST) returns on a monthly basis. The taxable period is, therefore, from 1 September 2015 to
30 September 2015.
+
The due date for CBP Sdn Bhd to submit its GST return (form GST-03) is no later than the last day of the
month following the end of the taxable period, i.e. on or before 31 October 2015.

(b)

Supplies

Output tax
RM
36,000
600
60

36,660

Sales of tiles to registered traders (600,000 x 6%)

Sales of tiles to non-registered traders (10,000 x 6%)
Sales of scrap (1,000 x 6%)

Purchases/acquisitions

Input tax
reclaimable
RM
600
12,000
Nil
60

12,660

Conference table (10,600 x 6%/106%)

Raw clay (212,000 x 6%/106% )
Medical expenses (staff) (blocked)
Entertainment (staff) (1,060 x 6%/106%)

Net GST payable (36,660 12,660)

24,000

Tutorial note: The input tax credit on the staff medical expenses cannot be reclaimed.

21

1
1

1
1
1
1

10

Marks
5

Space Tech Bhd

(a)

Chargeable income for the year of assessment 2015

(Basis period 1 October 2014 to 30 September 2015)
Note
Profit before taxation
Inventories written off
Depreciation
Gain on disposal of vacant land
Interest income
Expenditure on bus stop
Scholarship for study at a local university (double deduction)
Cash sponsorship of a customers dinner
Donations to unapproved institutions
Foreign exchange loss capital
Foreign exchange gain trade but unrealised
Audit fees
Expenses for maintaining sales office (double deduction)
Lease rental chief marketing officer
Lease rental van
Entertainment allowances for marketing team (50% x 40,000)
Leave passage
Annual general meeting (AGM) expenses

1
1
2
3
3
3
4
4

RM000s
+
2,122
Nil
2,350

500
30
Nil
6
5
32
35
150
Nil

5
6
6
7
7
8

500

1,186

110
Nil
20
4
1

4,679
(1,186)

3,493
(1,300)

2,193
30

2,223
Nil

2,223

Adjusted income
Less: Capital allowances
Statutory income
Add: Interest income
Aggregate income
Donations (unapproved)
Total/Chargeable income

(b)

RM000s

1
1

1
1

13

The conditions to be satisfied in order to claim the special deduction for the acquisition of proprietary rights
are that the claimant company:

must be at least 70% Malaysian owned; and

must be a resident company acquiring proprietary rights for industrial designs, patents and trademarks
which have been registered under the relevant laws for its own manufacturing business.

22

1+1

15

Marks
6

Spitz and Ono

(a)

Spitz Computation of chargeable income for the year of assessment 2015

RM
[Section 4(a)]
Business income Caf business
Profit before tax
Add/Less
Depreciation
Gain on disposal of non-current assets

26,966

26,966

+
RM

500

3,506

4,006
(26,966)

(22,960)

Nil

Adjusted loss
Statutory income from business
[Section 4(b)]
Employment
[Section 13(1)(a)]
Salary
Bonus
Service excellence award
Less: Exempt [Para 25C, Sch 6]

240,000
40,000
2,500
(2,000)

1
280,500

[Section 13(1)(b)]
Fully furnished accommodation (280 x 12 months)
Domestic servant (400 x 12 months)

3,360
4,800

8,160

[Section 13(1)(c)]
Living accommodation
30% of Section 13(1)(a) [(30% x 280,500) = 84,150
Defined value ((12,500 2,500) x 12] = 120,000
Lower
Adjusted income/statutory income from employment
[Section 4 (d)]
Royalty income from tranlation of book
Less: Exemption [Para 32A, Sch 6]

84,150

372,810
22,000
(12,000)

Aggregate income
Less: Current year loss [Section 44 (2)]
Less: Donations
Contribution-in-kind to project of national interest (approved)
Restricted to 7% of aggregate income (7% x 382,810)
Total income
Less: Personal reliefs
Self
Employees provident fund (maximum)

(26,797)

333,053

9,000
6,000

1
1

(15,000)

318,053

Chargeable income

(b)

55,650
26,797

10,000

382,810
(22,960)

359,850

1
1

13

Ono Residence
Ono is a non-resident for the year of assessment 2015 as she was present in Malaysia for a period of less
than 182 days during the year 2015 (AugustDecember 2015).

23

1+1

15