Question 2 David, a Canadian, first came to Malaysia with his family on 1 December 2019 to take up an appointment as a senior IT consultant in Telford Sdn. Bhd. He commenced his employment with the company on 1 January 2020. He stayed in Malaysia for the whole year 2020 except for the period of 1 October 2020 to 10 October 2020 when he returned to Canada for a social visit. His remuneration package for the year ended 31 December 2020 was as follows: (i) Basic salary per month: RM8,000 (ii) Bonus for the year 2020: RM15,000 (paid in January 2021) (iii) Entertainment allowance per annum: RM24,000 (iv) Reimbursement of business trips visiting customers: RM20,000 (v) A company car costing RM100,000 was provided for the whole year of 2020. (vi) An interest free loan of RM200,000 from his employer to finance the acquisition of his second car. The loan was given from the internal funds of the employer. The interest of the said loan would have been RM15,000 if it had been borrowed from a commercial bank. (vii) Leave passage to Canada: RM10,000 (vili) A fully furnished bungalow was provided for the whole year. The rental of RM5,000 (including RM1,000 for rental of furnishings) was paid by the company. Additional information relating to year ended 31 December 2020: (i) David spent RM28,000 to entertain customers. (ii) He received dividends amounting to RM10,000 from his portfolio of shares in Canada which was remitted into Malaysia. He also received rental income of RM80,000 from a property in Canada which was directly credited into his bank account in Canada. iii) Interest income of RM8,000 was received on his fixed deposits in Maybank. (iv) A cash donation of RM10,000 was made to the library of Tunku Abdul Rahman University College. (v) He has three children. The first child, aged 23, is physically disabled and pursuing a degree course in Australia. The second child, aged 17, is studying A levels in a local college. The third child, aged 15, is studying in an international school. His wife has no income for the year 2020. (vi) He bought a new smartphone costing RM2,000 for his wife and also spent RM1,000 on a gym membership. Required: (a) Determine the residence status of David for the year of assessment 2019 in accordance with the Income Tax Act, 1967. (4 marks) (b) Compute the income tax payable of David for the year of assessment 2020. (16 marks) [Total: 20 marks]
