Question 1 (a):

Bintang Sdn Bhd (Bintang) is a company resident in Malaysia. In the year 2020, Bintang purchased a machine from EE Ltd (EE), a company not resident in Malaysia. EE also sent an employee to Malaysia to provide technical services (in relation to the installation of machine) to Bintang. EE received RM25,000 from Bintang for this technical services provided.

Required:

1. In relation to the RM25,000, determine the class of income received by EE, and explain whether withholding tax is applicable. (6 marks)

2. Calculate the withholding tax (if any) on the payment for this technical services.

(3 marks)

3. Assume withholding tax is applicable, discuss Bintangs withholding tax obligations as well as the consequences of failure to comply with the relevant withholding tax provision when Bintang had claimed RM25,000 as deductible expenses for the year of assessment 2020. (8 marks)