2. Reliefs for the Year of Assessment (YA) 2020. RM 9,000 6,000 4,000 3,500 5,000 1.500 per parent 6,000 6,000 2,000 6,000 Personal relief Disabled taxpayer (additional relief) Spouse relief Disabled spouse relief (additional relief) Medical expenses for parents Parental care Medical expenses for serious diseases (including fertility treatment and medical examination expenses of up to RM500) Basic supporting equipment for disabled taxpayer, spouse, children, or parents Child relief (below 18 years old) - Each - Disabled Child relief (over 18 years old and studying in higher learning institutions) - Each - Disabled Net amount deposited into SSPN for child Premium on deferred annuity contract and private retirement scheme Employee's contribution to Employees' Provident Fund (EPF) or approved provident fund Premium on life insurance - Public servants under pension scheme - Others Premium on medical education insurance Employee's contribution to SOCSO scheme Education fees paid by taxpayer for his own self-improvement Lifestyle expenses Lifestyle expense (additional) Breastfeeding equipment Fees paid to childcare centre and kindergarten Payment for accommodation at registered premises and entrance fee to tourist attractions. 3. Rebates for the Year of Assessment (YA) 2020. 8,000 14,000 8,000 3,000 4,000 7,000 3,000 3,000 250 7,000 2,500 2,500 1,000 3,000 1,000 RM Chargeable income not exceeding RM35,000 - Individual - Additional relief when spouse relief is claimed 400 400 4. Values of benefits-in-kind. a. Car and fuel benefits Cost of car (when new) (RM) Fuel per annum (RM) Up to 50,000 50,001 - 75,000 75,001 - 100,000 100,001 - 150,000 150,001 - 200,000 200,001 - 250.000 250,001 - 350,000 350,001 - 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 25,000 600 900 1.200 1,500 1,800 2,100 2,400 2,700 3,000 The value of car benefit equal to half of the above prescribed annual value is taken if the car provided is more than five years old, but the value of the fuel provided remains unchanged. Where a driver is provided by the employer, the value of the benefit per month is fixed at RM600. b. Household furnishing, equipment, and appliances Type of benefits Annual value of benefit (RM) 840 1,680 a. Semi-furnished with furniture in the lounge, dining room, or bedrooms. b. Semi-furnished with furniture as in (a) above and one or more of the following: air-conditioners, curtains and carpets. c. Fully-furnished with furniture as in (a) and (b) above and one or more of the following: kitchen equipment, crockery, utensils, and appliances. 3,360 c. Provision of the following benefits by employer Gardeners Domestic servants Guard RM3,600 per annum RM4,800 per annum RM4,800 per annum 5. Capital and industrial building allowances Initial allowance rate (%) 20 20 Annual allowance rate (%) 20 14 Type of assets Motor vehicles and heavy machinery General plant and machinery Office equipment, furniture and fittings, others Computers, information technology equipment and computer software, accelerated capital allowance Industrial building 20 10 20 40 10 3 Part B Mr. Govind Samy is a Malaysian-bom photographer working with an international wildlife foundation. Even though his work is mainly based in Malaysia, he has been travelling a lot in recent years. In the year 2020, he was sponsored by his employer to pursue a professional course in the Stockholm Photography Academy which caused him to stay the entire year in Sweden The following table details his history of travel from the years 2016 to 2021. Year 2016 2017 2018 Period of stay in Malaysia 31.12.2016 - 31.12.2016 01.01.2017 - 21.02.2017 08.03.2017 - 17.07.2017 01.04.2018 - 30.05.2018 01.08.2018 - 01.10.2018 01.06.2019 - 14.09.2019 13.11.2019 - 31.12.2019 Not in Malaysia 01.01.2021 - 02.07.2021 No. of days 1 52 132 60 62 106 49 0 2019 2020 2021 183 Mr. Govind Samy had taken leave from work to attend a prayer for his late grandfather in Varanasi, India from 22.02.2017 to 07.03.2017. Continued... NDM RMZ 6/12 BAC2674 TAXATION 1 30 NOVEMBER 2021 Required: Determine Mr. Govind Samy's tax residence status for each of the relevant Years of Assessment. Support your answers using the relevant provisions of the Income Tax Act 1967 (as amended). (14 marks) Part A On 11 August 2019, Mr. Wee had finalised his purchase of a semi-detached house in Bukit Bintang and decided to turn the house into an investment property for extra income. The house was made available for rent at RM15,000 per month. Continued... NDM/RMZ 5/12 BAC2674 TAXATION 1 30 NOVEMBER 2021 On 15 December 2019, Mr. Wee had entered into a three-year rental agreement starting from January 2020 with Mr. Kruger. Mr. Kruger is to pay Mr. Wee a refundable security deposit of three-month rental and a utility deposit of RM3,000 before 31 January 2020. During the year 2020. Mr. Wee had incurred the following expenditures with regard to the house. Legal cost for preparing the first rental tenancy agreement and stamp duty Installation of air-conditioners, water heaters, and water purifiers Furniture and fittings Fire insurance premium for the year 2020 Interest on loan for the year 2020 Quit rent and assessment RM 4.100 28,800 19,860 3,000 57,360 2,040 115,160 Required: Compute the statutory rental income of Mr. Wee for the Year of Assessment (YA) 2020. Indicate nil in appropriate column for all items that do not require any adjustment. (6 marks) Calculate the total income of Datin Farah for YA2020. Note: Start your computation with profit before taxation figure. Indicate 'nil' in the appropriate column for item that does not require adjustment. (14 marks) De' Ayu Cosmetics Cosmeceutical Product Manufacturing Business Statement of Profit and Loss For the Financial Year Ended 31 December 2020 Note RM 2 Revenue Less: Cost of sales Gross profit Add: Other income RM 1,200,000 (460,000) 740,000 8.000 748,000 3 Less: Expenditures Staff cost Miscellaneous expense (trade related) Research and development Profit before tax 263,100 300,000 18,000 5 (581.100) 166,900 Notes: [Note 1 relates to the beauty and personal care consultation services business) 1. Miscellaneous expenses included contribution of groceries worth RM2,000 to Yayasan Food Bank Malaysia (YFBM), which was an approved institution. [Notes 2 to 6 relate to the cosmeceutical product manufacturing business 2. Cost of sales included damaged stocks written-off of RM3,120. 3. Other income was made up of gross dividend received during the year from investment in shares of listed companies in Indonesia. 4. Staff costs comprised of staff salaries amounting to RM210,000, contribution to the Employees' Provident Fund (EPF) totalling RM23,100, and staff annual dinner costing RM30,000. 5. Expenses incurred were for approved research and development activities with regard to the development of new colours for the cosmetics. 6. Additional information: i. The capital allowance for the Year of Assessment (YA) 2020 was RM35,000. ii. The unabsorbed loss brought forward from YA2019 was RM15,200. QUESTION 3 Part A De' Ayu Cosmetics is solely owned by Datin Farah and manufactures cosmeceutical products for the local market. It closes its account on 31 December annually. During the financial year 2020, De' Ayu Cosmetics has introduced a new business line involving beauty and personal care consultation services. Datin Farah leads this consultation services along with few staffs from the existing manufacturing business. The statements of profit and loss for each business lines of De' Ayu Cosmetics for the financial year ended 31 December 2020 are as follows. De Ayu Cosmetics Beauty and Personal Care Consultation Services Business Statement of Profit and Loss For the Financial Year Ended 31 December 2020 Note RM RM Revenue 119,000 Less: Entertainment expenses (general) 15,000 Salaries for employees 24,000 Miscellaneous expenses 1 37,000 (76,000) Profit before tax 43.000 2. Reliefs for the Year of Assessment (YA) 2020. RM 9,000 6,000 4,000 3,500 5,000 1.500 per parent 6,000 6,000 2,000 6,000 Personal relief Disabled taxpayer (additional relief) Spouse relief Disabled spouse relief (additional relief) Medical expenses for parents Parental care Medical expenses for serious diseases (including fertility treatment and medical examination expenses of up to RM500) Basic supporting equipment for disabled taxpayer, spouse, children, or parents Child relief (below 18 years old) - Each - Disabled Child relief (over 18 years old and studying in higher learning institutions) - Each - Disabled Net amount deposited into SSPN for child Premium on deferred annuity contract and private retirement scheme Employee's contribution to Employees' Provident Fund (EPF) or approved provident fund Premium on life insurance - Public servants under pension scheme - Others Premium on medical education insurance Employee's contribution to SOCSO scheme Education fees paid by taxpayer for his own self-improvement Lifestyle expenses Lifestyle expense (additional) Breastfeeding equipment Fees paid to childcare centre and kindergarten Payment for accommodation at registered premises and entrance fee to tourist attractions. 3. Rebates for the Year of Assessment (YA) 2020. 8,000 14,000 8,000 3,000 4,000 7,000 3,000 3,000 250 7,000 2,500 2,500 1,000 3,000 1,000 RM Chargeable income not exceeding RM35,000 - Individual - Additional relief when spouse relief is claimed 400 400 4. Values of benefits-in-kind. a. Car and fuel benefits Cost of car (when new) (RM) Fuel per annum (RM) Up to 50,000 50,001 - 75,000 75,001 - 100,000 100,001 - 150,000 150,001 - 200,000 200,001 - 250.000 250,001 - 350,000 350,001 - 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 25,000 600 900 1.200 1,500 1,800 2,100 2,400 2,700 3,000 The value of car benefit equal to half of the above prescribed annual value is taken if the car provided is more than five years old, but the value of the fuel provided remains unchanged. Where a driver is provided by the employer, the value of the benefit per month is fixed at RM600. b. Household furnishing, equipment, and appliances Type of benefits Annual value of benefit (RM) 840 1,680 a. Semi-furnished with furniture in the lounge, dining room, or bedrooms. b. Semi-furnished with furniture as in (a) above and one or more of the following: air-conditioners, curtains and carpets. c. Fully-furnished with furniture as in (a) and (b) above and one or more of the following: kitchen equipment, crockery, utensils, and appliances. 3,360 c. Provision of the following benefits by employer Gardeners Domestic servants Guard RM3,600 per annum RM4,800 per annum RM4,800 per annum 5. Capital and industrial building allowances Initial allowance rate (%) 20 20 Annual allowance rate (%) 20 14 Type of assets Motor vehicles and heavy machinery General plant and machinery Office equipment, furniture and fittings, others Computers, information technology equipment and computer software, accelerated capital allowance Industrial building 20 10 20 40 10 3 Part B Mr. Govind Samy is a Malaysian-bom photographer working with an international wildlife foundation. Even though his work is mainly based in Malaysia, he has been travelling a lot in recent years. In the year 2020, he was sponsored by his employer to pursue a professional course in the Stockholm Photography Academy which caused him to stay the entire year in Sweden The following table details his history of travel from the years 2016 to 2021. Year 2016 2017 2018 Period of stay in Malaysia 31.12.2016 - 31.12.2016 01.01.2017 - 21.02.2017 08.03.2017 - 17.07.2017 01.04.2018 - 30.05.2018 01.08.2018 - 01.10.2018 01.06.2019 - 14.09.2019 13.11.2019 - 31.12.2019 Not in Malaysia 01.01.2021 - 02.07.2021 No. of days 1 52 132 60 62 106 49 0 2019 2020 2021 183 Mr. Govind Samy had taken leave from work to attend a prayer for his late grandfather in Varanasi, India from 22.02.2017 to 07.03.2017. Continued... NDM RMZ 6/12 BAC2674 TAXATION 1 30 NOVEMBER 2021 Required: Determine Mr. Govind Samy's tax residence status for each of the relevant Years of Assessment. Support your answers using the relevant provisions of the Income Tax Act 1967 (as amended). (14 marks) Part A On 11 August 2019, Mr. Wee had finalised his purchase of a semi-detached house in Bukit Bintang and decided to turn the house into an investment property for extra income. The house was made available for rent at RM15,000 per month. Continued... NDM/RMZ 5/12 BAC2674 TAXATION 1 30 NOVEMBER 2021 On 15 December 2019, Mr. Wee had entered into a three-year rental agreement starting from January 2020 with Mr. Kruger. Mr. Kruger is to pay Mr. Wee a refundable security deposit of three-month rental and a utility deposit of RM3,000 before 31 January 2020. During the year 2020. Mr. Wee had incurred the following expenditures with regard to the house. Legal cost for preparing the first rental tenancy agreement and stamp duty Installation of air-conditioners, water heaters, and water purifiers Furniture and fittings Fire insurance premium for the year 2020 Interest on loan for the year 2020 Quit rent and assessment RM 4.100 28,800 19,860 3,000 57,360 2,040 115,160 Required: Compute the statutory rental income of Mr. Wee for the Year of Assessment (YA) 2020. Indicate nil in appropriate column for all items that do not require any adjustment. (6 marks) Calculate the total income of Datin Farah for YA2020. Note: Start your computation with profit before taxation figure. Indicate 'nil' in the appropriate column for item that does not require adjustment. (14 marks) De' Ayu Cosmetics Cosmeceutical Product Manufacturing Business Statement of Profit and Loss For the Financial Year Ended 31 December 2020 Note RM 2 Revenue Less: Cost of sales Gross profit Add: Other income RM 1,200,000 (460,000) 740,000 8.000 748,000 3 Less: Expenditures Staff cost Miscellaneous expense (trade related) Research and development Profit before tax 263,100 300,000 18,000 5 (581.100) 166,900 Notes: [Note 1 relates to the beauty and personal care consultation services business) 1. Miscellaneous expenses included contribution of groceries worth RM2,000 to Yayasan Food Bank Malaysia (YFBM), which was an approved institution. [Notes 2 to 6 relate to the cosmeceutical product manufacturing business 2. Cost of sales included damaged stocks written-off of RM3,120. 3. Other income was made up of gross dividend received during the year from investment in shares of listed companies in Indonesia. 4. Staff costs comprised of staff salaries amounting to RM210,000, contribution to the Employees' Provident Fund (EPF) totalling RM23,100, and staff annual dinner costing RM30,000. 5. Expenses incurred were for approved research and development activities with regard to the development of new colours for the cosmetics. 6. Additional information: i. The capital allowance for the Year of Assessment (YA) 2020 was RM35,000. ii. The unabsorbed loss brought forward from YA2019 was RM15,200. QUESTION 3 Part A De' Ayu Cosmetics is solely owned by Datin Farah and manufactures cosmeceutical products for the local market. It closes its account on 31 December annually. During the financial year 2020, De' Ayu Cosmetics has introduced a new business line involving beauty and personal care consultation services. Datin Farah leads this consultation services along with few staffs from the existing manufacturing business. The statements of profit and loss for each business lines of De' Ayu Cosmetics for the financial year ended 31 December 2020 are as follows. De Ayu Cosmetics Beauty and Personal Care Consultation Services Business Statement of Profit and Loss For the Financial Year Ended 31 December 2020 Note RM RM Revenue 119,000 Less: Entertainment expenses (general) 15,000 Salaries for employees 24,000 Miscellaneous expenses 1 37,000 (76,000) Profit before tax 43.000