Rayyan and Linda, tax residents of Malaysia, are married with three children. Rayyan is employed as a marketing manager in a listed company since February 2020, while Lara is a housewife and operates an online business from home. Details of Rayyan’s employment income, benefits and expenditure for the year ended 31 December 2020 are as follows:

Income and benefits in kind:

 

	RM
Salary	180,000
Bonus (received for sales performance in year 2020)	30,000
Entertainment allowance	5,000
Renewal of subscription fees to Institute of Marketing Malaysia	500
Reward for best employee of the year	3,500
Lucky draw (LED TV) during annual dinner	3,000
Company car provided to Rayyan: cost when new (less than 5 years)	220,000
Driver’s salary (hired and paid by his employer)	24,000
Maid’s salary (salary paid by Rayyan and reimbursed by employer)             12,000
Cost of mobile phone (under Rayyan’s name) provided by his employer	2,500
Total of monthly bills for the mobile phone paid by his employer	1,300
Total leave passages paid by his employer for a trip to New Zealand	15,000
Medical and dental benefits	5,000

 

Rayyan is also provided with fully-furnished semi-detached house which has a monthly rental value of RM2,500.

 

The following Rayyan’s expenses and contributions in 2020:

1. RM2,000 for entertaining clients as part of his official duty.
2. RM25,000 for the first child who is 22 years old, pursuing a full time degree in a local university and married.
3. RM5,000 for the second child who is 17 years old and pursuing a pre-nursing course in preparation for a nursing degree in a local university.
4. RM8,000 for the third child who is 10 years old and who has an OKU card.
5. RM7,000 for basic medical equipments and medicines for Rayyan’s mother who is paralysed after suffering from stroke.
6. Rayyan’s contribution to the Employee Provident Fund in 2020 were RM8,910.
7. In 2020, Rayyan incurred RM1,200 to buy books.
8. In 2020, Rayyan made a cash contribution of RM21,000 to a public library in Shah Alam, Selangor.

Required:

 

(a) Assuming Rayyan has elected for a separate assessment, compute the income tax liability of Rayyan for the year of assessment 2020. 

(15 marks)

 

b) Keith is a non-resident exercising an employment in Malaysia and his periods of stay in Malaysia are as follows:

 

Basis year                                                                         No. of days

2019. 22 November – 31 December                        40
2020. 1 January – 25 January                                  25

                          5 April – 10 April (Holiday in Sabah)             6

                                                                                                  71

 

During his stay in Malaysia, he also received payments from a company in Denmark for his translation works. This service was not a part of his employment in Malaysia. He provided such services as a freelancer.

 

Required:

Advise whether Keith is exercising an employment income for both types of income and whether those income were derived from Malaysia and chargeable to Malaysian Income Tax for the years of assessment 2019 and 2020.