Bbaa2023 Taxation|Cash Donation Assessment Answer

QUESTION 1 (BASIS PERIOD CHAPTER)

Sweet Sdn Bhd commenced its business on 1 August 2014 and prepared its account to 28 February annually. In 2017, due to some technical problems, the board of directors decided to change its accounting year end to 31 December. The adjusted income/(loss) for the relevant accounting periods are as follows:

Accounting Periods Adjusted lncome/(loss)

      RM

1 August 2014 - 28 February 2015 (16,000)

1 March 2015  - 28 February 2016     27,000

1 March 2016  - 28 February 2017   35,000

1 March 2017  - 31 December 2017   21,000

1 January 2018 - 31 December 2018   48,000

Required:

Determine the basis period and adjusted income/(loss) for the relevant years of assessment.

QUESTION 2 (WITHHOLDING CHAPTER)

Ayer Moiek Sdn Bhd is currently developing a sport complex for futsal in Sungai Layar. During the year ended 30 September 2019 the company made the following payments:

1. RM3,500,500 to Sport Unity Ltd. (resident in Australia) for work carried out for the sport complex.

The breakdown of the RM3,500,500 is as follows:

Nature of payment RM

Cost of plant and machinery 1,200,000

Technical advice on the installation of plant and        700,000

machinery rendered in Malaysia

Contract work on infrastructure and building carried out in Malaysia 1,600,500

2. RM998.000 being royalties paid to Sport Planet Ampang (resident company based in Ampang, Selangor) for use of patents relating to foundation work.

Required:

State with reasons whether the above payments made by Ayer Moiek Sdn Bhd are subject to withholding tax. State the rate(s) imposed, sections (if any) and the amount of withholding tax (if applicable), and the due date of payment.                                                      

QUESTION 3 (CORPORATE TAXATION CHAPTER)

Pavilion Bhd a company engaged in the manufacturing of kitchen appliances, prepares its

accounts to 30 September annually. The company is resident in Malaysia for tax purposes

and its trading, profit and loss account for the year ended 30 September 2019 is as follows:

Pavilion Bhd

Trading, Profit and Loss Account for the year ended 30 September 2019