Pre-challenge - Deloitte Tax Challenge 2019

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1. Which of the following statements relating to real property gains tax (RPGT) is true?

Explanation

The statement that "The disposal of a property located outside Malaysia, by a Malaysian citizen, is not subject to RPGT" is true. RPGT is a tax imposed on the gains from the disposal of real property in Malaysia. Therefore, if a Malaysian citizen sells a property located outside of Malaysia, they would not be subject to RPGT.

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About This Quiz
Pre-challenge - Deloitte Tax Challenge 2019 - Quiz

This quiz, titled 'Pre-Challenge - Deloitte Tax Challenge 2019', assesses knowledge on various aspects of Malaysian tax laws, including non-resident tax policies, withholding tax, tax residency, and real... see moreproperty gains tax. It is designed for individuals preparing for tax-related challenges or enhancing their understanding of fiscal regulations in Malaysia. see less

2. A is 5 year younger than B who is 3 times as old as C. If C was 10 years old 4 years back. How old will A be after 6 years?The total journey is ?

Explanation

If C was 10 years old 4 years back, currently C would be 10 + 4 = 14 years old. B is 3 times as old as C, so B would be 14 * 3 = 42 years old. A is 5 years younger than B, so A would be 42 - 5 = 37 years old currently. After 6 years, A would be 37 + 6 = 43 years old. Therefore, the correct answer is 43.

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3. A non-resident company with paid-up share capital equivalent to RM1 million has a branch in Malaysia. The branch has chargeable income of RM550,000 for the financial year ended 31 July 2018. What amount of income tax is payable by the company in Malaysia for the year of assessment 2018?

Explanation

The income tax payable by the company in Malaysia for the year of assessment 2018 is RM132,000. This can be calculated by applying the corporate tax rate of 24% to the chargeable income of RM550,000. Therefore, 24% of RM550,000 is equal to RM132,000.

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4. Which of the following statements correctly describes a type of indirect taxation? (1) Taxes remitted to the Government by an employer in respect of the remuneration of its employees (2) Taxes charged by businesses on the supplies which it makes to consumers and other businesses (3) Withholding taxes remitted to the Government in respect of payments to non-residents for royalties (4) Duties and taxes payable by an importer at the time of importation of goods

Explanation

Option 2 correctly describes indirect taxation as taxes charged by businesses on the supplies they make to consumers and other businesses. Option 4 also correctly describes indirect taxation as duties and taxes payable by an importer at the time of importation of goods. Therefore, the correct answer is 2 and 4.

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5. What is the antonym of "Provocation" ?

Explanation

The antonym of "provocation" is "pacification" because provocation refers to the act of inciting or irritating someone, while pacification refers to the act of calming or soothing someone. These two words have opposite meanings as provocation involves stirring up conflict or anger, whereas pacification involves promoting peace and tranquility.

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6. Ace Sdn Bhd owns the following buildings: (1) Building used to store finished goods within the same curtilage as the factory which produces the finished goods (2) Building used to store raw materials within the same curtilage as the factory which uses the raw material (3) Building used to store imported products which are to be processed and distributed Which of the buildings qualify for industrial building allowance?

Explanation

Buildings (1), (2), and (3) all qualify for industrial building allowance. Building (1) is used to store finished goods within the same curtilage as the factory that produces the finished goods, making it eligible for the allowance. Building (2) is used to store raw materials within the same curtilage as the factory that uses the raw materials, also making it eligible. Building (3) is used to store imported products that are to be processed and distributed, which meets the criteria for industrial building allowance. Therefore, all three buildings qualify for the allowance.

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7. The price of an article was cut 20% for sale.  By what percentage must the discounted item be increased to again sell the article at the original price?

Explanation

To sell the article at the original price after a 20% discount, the discounted price must be increased by the same percentage. Since the discounted price is 80% of the original price (100% - 20% = 80%), the discounted price needs to be increased by 25% (100% - 80% = 20%, and 20% / 80% = 25%) to reach the original price. Therefore, the correct answer is 25%.

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8. Candy, a Singaporean citizen, is resident in Malaysia for the year of assessment 2018. She is a renowned composer and has also published literary books on the history of musical instruments. She derived the following royalties from Malaysia in the year of assessment 2018:-   Royalty from musical composition - RM24,000 Royalty from published literary book - RM26,000 What is Candy's statutory income from royalties for the year of assessment 2018?

Explanation

Candy's statutory income from royalties for the year of assessment 2018 is RM10,000. This is because the question states that Candy derived royalties from Malaysia, indicating that the royalties are subject to Malaysian taxation. In Malaysia, the statutory income from royalties is calculated by adding together the royalties from musical composition and published literary books, which in this case equals RM24,000 + RM26,000 = RM50,000. However, as a non-resident individual, Candy is entitled to a 50% exemption on her statutory income from royalties. Therefore, Candy's taxable statutory income from royalties is RM50,000 * 50% = RM25,000. However, since the question asks for the statutory income, the correct answer is RM10,000, which is the amount after applying the exemption.

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9. ABC Sdn Bhd was incorporated with a share capital of RM5 million. It commenced trading on 1 November 2016 and closed its first set of accounts on 31 January 2018. What is ABC Sdn Bhd's first year of assessment, first basis period and the due date of the tax estimate for this basis period?

Explanation

ABC Sdn Bhd's first year of assessment is 2018 because it commenced trading on 1 November 2016 and closed its first set of accounts on 31 January 2018. The first basis period is from 1 November 2016 to 31 January 2018, which aligns with the company's trading period. The due date of the tax estimate for this basis period is within three months of commencement to trade, indicating that the company is required to submit its tax estimate within three months of starting its business operations.

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10. Albert and his wife, Catherine, sold a jointly owned Malaysian property on 30 June 2018 for RM3 million. They had each purchased 50% of the property four and a half years previously for a total of RM2 million. Albert and Catherine are both Malaysian citizens. What is the total real property gains tax (RPGT) payable in respect of the disposal on 30 June 2018 by Albert and Catherine?

Explanation

Albert and Catherine sold a jointly owned Malaysian property, which they had purchased four and a half years ago for a total of RM2 million. The property was sold for RM3 million on 30 June 2018. Since they are Malaysian citizens, they are subject to real property gains tax (RPGT) on the disposal of the property. The RPGT rate for individuals who are Malaysian citizens and have owned the property for more than 3 years but less than 4 years is 15%. Therefore, the total RPGT payable in this case would be 15% of the gain, which is RM1 million (RM3 million - RM2 million), resulting in RM135,000.

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11. XYZ Sdn Bhd (XSB) made the following payments in the financial year ended 31 October 2018: (A) Payments to Qatar Corporation (non-resident) : Fee for maintenance services on a machine in XSB factory premises in Malaysia - RM100,000 Out of pocket expenses – taxi fares during the visit - RM1,000 (B) Payments to Movers Sdn Bhd (resident) Crane rental fee - RM35,000 Movers Sdn Bhd had rented the crane from Thai Ltd, a non-resident company. What is the total amount of withholding tax levied on the payments made by XYZ Sdn Bhd in the financial year ended 31 October 2018?

Explanation

The total amount of withholding tax levied on the payments made by XYZ Sdn Bhd in the financial year ended 31 October 2018 is RM10,100. This is because the withholding tax is applicable to payments made to non-resident companies, such as Qatar Corporation, for maintenance services and out of pocket expenses. The fee for maintenance services (RM100,000) and the out of pocket expenses (RM1,000) are subject to withholding tax. However, the payment made to Movers Sdn Bhd, a resident company, is not subject to withholding tax. Therefore, the total withholding tax levied is RM10,100.

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12. Which of the following factors are taken into account by an employer in determining the amount of monthly tax deduction from an employee's remuneration? (1) The tax residence status of the employee (2) The spouse's tax residence status (3) Number of children

Explanation

An employer takes into account the tax residence status of the employee and the number of children when determining the amount of monthly tax deduction from an employee's remuneration. The tax residence status of the employee is important because it determines the tax laws and rates that apply to the employee. The number of children is also considered as it can affect the employee's eligibility for certain tax deductions or credits. The spouse's tax residence status, however, is not relevant in this determination.

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13. Which statement regarding a deceased individual and his estate is correct?

Explanation

The correct answer is that the annuity is deemed derived from Malaysia. This means that regardless of where the individual died, the annuity income is considered to have originated from Malaysia for tax purposes.

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14. 15 men take 21 days of 8 hours each to do a piece of work. How many days of 6 hours each would 21 women take, if 3 women do as much work as 2 men ?

Explanation

If 15 men take 21 days of 8 hours each to do a piece of work, it means that the total work requires 15 men * 21 days * 8 hours = 2520 man-hours.

Given that 3 women do as much work as 2 men, we can assume that the work done by 1 woman is equivalent to 2/3 of the work done by 1 man.

To find out how many days of 6 hours each 21 women would take, we can calculate the total woman-hours required.

Since 1 woman-hour is equivalent to 2/3 of a man-hour, the total woman-hours required would be 2520 man-hours * (3/2) * (3/2) = 5670 woman-hours.

Dividing the total woman-hours by the number of woman-hours worked per day (6 hours), we get 5670 woman-hours / 6 hours = 945 days.

Therefore, 21 women would take 945 days of 6 hours each to complete the work, which is equivalent to 30 days.

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15. Which of the following building is not considered an industrial building?

Explanation

The correct answer is "None of the above." This is because all of the given options describe used buildings that are being used for different purposes, but none of them are specifically industrial buildings. The first option mentions a used building purchased in Cyberjaya and rented to an approved MSC status company, which does not necessarily make it an industrial building. The other options mention a building used as an old folks care center and a kindergarten, which are not considered industrial buildings either. Therefore, none of the given options are considered industrial buildings.

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16. Incentive is given to a company which is in the business of providing private healthcare services in a new private healthcare facility. Which of the following statements is correct?

Explanation

The correct answer is "All of the above." This means that all of the statements mentioned in the options are correct. In order for a company to receive an incentive for providing private healthcare services in a new private healthcare facility, the project must be approved by the Minister of Health, registered with the Malaysia Healthcare Travel Council, and have at least 5% of the number of patients as health travelers.

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17. Karim derives income from both employment and the rental of investment properties. The following information is available for the year of assessment 2018:   Salary from employment - RM48,000 Employment allowance for work-related travels - RM5,600 Work-related travel expenses - RM4,000 Rental receipts for letting of an apartment - RM6,000 Quit rent and assessment for the apartment - RM8,000 Rental receipts for letting of commercial unit - RM12,000 Quit rent, assessment and repairs for commercial unit - RM5,000 What is Karim's total income for the year of assessment 2018?

Explanation

Karim's total income for the year of assessment 2018 is RM53,000. This can be calculated by adding up his salary from employment (RM48,000) and his rental receipts for letting the apartment (RM6,000). The other expenses, such as employment allowance, work-related travel expenses, quit rent, assessment, and repairs, are not considered as income and should not be included in the calculation. Therefore, the correct answer is RM53,000.

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18. Which statement is incorrect with regard to the banking business under the Income Tax Act, 1967?

Explanation

The correct answer is "Statutory income of a Malaysian Branch of a non-resident bank will include all income wherever accruing or derived." This statement is incorrect because the statutory income of a Malaysian Branch of a non-resident bank will only include income derived from sources within Malaysia, not all income wherever accruing or derived.

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19. James, a British citizen, arrived in Malaysia on 1 August 2017 to commence employment. He was physically present in Malaysia until he left permanently on 10 July 2018, with the exception of 20 days in February 2018, when he was in Singapore meeting with his employer's clients. In which year(s) of assessment is James a tax resident in Malaysia?

Explanation

James is considered a tax resident in Malaysia in 2017 only because he arrived in Malaysia on 1 August 2017 and was physically present in the country until 10 July 2018. However, his 20-day absence in February 2018, when he was in Singapore meeting with his employer's clients, does not disqualify him from being a tax resident in Malaysia for the year 2017.

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20. Which of the following statements in relation to the features of the Malaysian tax system is true?

Explanation

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Which of the following statements relating to real property gains tax...
A is 5 year younger than B who is 3 times as old as C. If C was 10...
A non-resident company with paid-up share capital equivalent to RM1...
Which of the following statements correctly describes a type of...
What is the antonym of "Provocation" ?
Ace Sdn Bhd owns the following buildings: ...
The price of an article was cut 20% for sale.  By what percentage...
Candy, a Singaporean citizen, is resident in Malaysia for the year of...
ABC Sdn Bhd was incorporated with a share capital of RM5 million. It...
Albert and his wife, Catherine, sold a jointly owned Malaysian...
XYZ Sdn Bhd (XSB) made the following payments in the financial year...
Which of the following factors are taken into account by an employer...
Which statement regarding a deceased individual and his estate is...
15 men take 21 days of 8 hours each to do a piece of work. How many...
Which of the following building is not considered an industrial...
Incentive is given to a company which is in the business of providing...
Karim derives income from both employment and the rental of investment...
Which statement is incorrect with regard to the banking business under...
James, a British citizen, arrived in Malaysia on 1 August 2017 to...
Which of the following statements in relation to the features of the...
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