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QUESTION 2 SleepWell Limited is a Norwegian multi-national corporation that manufactures and trades bedroom furniture. As part of its plan to expand its business to
QUESTION 2 SleepWell Limited is a Norwegian multi-national corporation that manufactures and trades bedroom furniture. As part of its plan to expand its business to the Southeast Asian market, it wishes to set up a branch office to distribute and sell its products in Malaysia in the year 2022. The firm's directors have been given the following two options by its accountant: Option 1 SleepWell Limited is to employ a manager and four support staff who are all local. The manager is authorised to act and decide in operational matters, excepting for transactions involving more than RM100,000. The branch will be subject to decisions and directions made by the directors in meetings to be held in the firm's headquarters. Option 2 SleepWell Limited is to send one of its directors from Norway to Malaysia to oversee the branchs manager and four support staff, who are all local. The director is authorised to act and decide in all operational matters, with no limit on the transactions. The board of directors is to have their annual meets for key decision-making at location decided on rotation basis, with the Malaysian branch being chosen as the host for the year 2022. Required: Advise the directors of SleepWell Limited on the most advantageous option for its branch's tax position in Malaysia. Give reasons for your advice
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