Question: What is the tax implication on Business Expenditure for MMSB. (based on Malaysia Taxation) Tax implications relating to the construction of the hotel and its financing including tax compliance and any mitigating measures for tax efficiency.

Mr Jest's personal tax matters: 1. 2. Mr. Jest will be based in Kuala Lumpur during his work with MMSB. His work scope includes short physical visits to Marconi Group of companies in Australia and New Zealand but only if the situation allows. He is offered a remuneration package which consist a salary of RM180,000 per annum and Employees Provident Fund (EPF) contribution of 12%. MMSB is willing to offer him a more tax efficient remuneration package that is based on your tax firm's proposal. In addition, the relocation expenses to Malaysia incurred by Jest will be borne by MMSB. 3. He expressed that the following to be included if an alternative remuneration package is provided to him by MMSB: Estimated (RM) A new company car 120,000 A driver 1,500 per month A fully furnished house 2,000 per month One trip to and from Italy 10,000 A week's tour to Bali 7,000 He is willing to consider tax efficient benefits other than the above. 4. He will be travelling alone to Malaysia from Italy in early September 2021. He plans to travel home to Italy in the last week of December 2021 and be back to Malaysia in the first week of 2022. He hopes to travel to Bali, Indonesia for a week sometime in April or May 2022. MMSB and Mr. Jest understand that the above plans are subject to the improvement of the Covid-19 pandemic situation and travel restrictions. Construction and financing of the construction of a 500-room hotel and a conference hall 1. MMSB will be entering into a contract with its holding company, Marconi SpA (MSpA), a non-tax resident, to undertake the hotel project. In spite of the uncertainties due to the Covid-19 pandemic situation, they foresee that the project can commence on 1 February 2022 and complete by the end of 2025. Mr Jest, the Chief Engineer, will lead in supervising the Project with the assistance of a few engineers from MSpA who will be seconded to MMSB. The total contract fee is RM800 million. It includes equipment, materials, professional services which include services provided by MSpA in Italy. MMSB will make four quarterly payments in a year to MSpA, with the first payment due on 31 March 2022. 3. To finance the project, MMSB will arrange to get a loan of RM200 million at an interest rate of 4% per annum from a related company, Marconi Australia Ltd. (MAL). 2