Stage 1 (Individual) Deloitte Tax Challenge 2019
- 1.Which of the following term is defined in the Income Tax Act, 1967?
- A.
Plant
- B.
Machinery
- C.
Building
- D.
All of the above
- 2.Which income is said to be derived from Malaysia?
- A.
Royalty income received by a Malaysian tax resident that relates to the usage of intellectual property outside Malaysia
- B.
Interest paid by a Malaysian tax resident to a non-resident
- C.
Services rendered by a Malaysian tax resident via an overseas branch
- D.
Employment income paid by a Malaysian tax resident that relates to employment exercised outside Malaysia
- 3.In considering a deduction for tax rebate (other than zakat or fitrah) which of the following is correct?
- A.
An individual resident taxpayer who has claimed personal relief is not eligible for a tax rebate
- B.
An individual resident taxpayer with a total income of RM40,000 is eligible for a tax rebate
- C.
If the wife has claimed a tax rebate, the husband cannot claim a tax rebate
- D.
None of the above
- 4.In arriving at the adjusted income of a business for a company, the following would not qualify for tax deduction:- I. Incorporation expenses of a company with authorised capital not exceeding RM2.5 million at the point of incorporation II. Donations to approved institutions in a relevant year for a year of assessment III. Expenditure on providing infrastructure in relation to its business which is available for public use IV. Revenue expenditure incurred by employers on the provision and maintenance of childcare centre for the benefit of the employees
- A.
I and II
- B.
II and III
- C.
I and III
- D.
II, III and IV
- 5.In preparing the income tax computation for XYZ Sdn Bhd, the following qualify for tax deduction:- I. Expenses relating to maintenance of shareholders’ register II. Immigration and professional fees in relation to employment pass for employees III. Gift with company's logo for customer's annual dinner IV. Expenditure on renovation to set up a new branch V. Legal fees incurred for recovery of trade debts
- A.
I, II and IV
- B.
III and V
- C.
II, III and V
- D.
I, II and III
- 6.Which of the following traveling expenses would qualify for tax deduction?
- A.
Air fares to Pulau Langkawi for the directors and their family members
- B.
Air fares to Phuket for the employees and their immediate family for the annual company trip
- C.
Air fares to Singapore for the directors to attend a charity concert together with their business associates
- D.
None of the above
- 7.All expenses incurred on food and drinks qualify for 100% tax deduction except for:-
- A.
Food and drinks provided during the launch of the 1st housing project
- B.
Food and drinks provided in a meeting with suppliers
- C.
Food and drinks provided during a directors' first meeting in the year
- D.
Meals provided to employee during a holiday to Genting Highlands
- 8.Which of the following interest expense does not qualify for tax deduction?
- A.
Interest expense arising from bank loan for purchase of commercial properties for long term investment purposes
- B.
Interest expense arising from bank overdraft for working capital purposes
- C.
Interest expense arising from bank loan for purchase of plant and machinery
- D.
Interest expense arising from bank loan to purchase shares where single tier dividend was received
- 9.The adjusted loss surrendered by a surrendering company to a claimant company shall be allowed as a deduction against:-
- A.
The total income of the claimant company
- B.
The aggregate statutory income of the claimant company from business source only
- C.
The defined aggregate income of the claimant company
- D.
70% of the adjusted income of the claimant company
- 10.In order to be eligible for group relief for a year of assessment (YA), both surrendering and claimant companies must:-
- A.
Be related companies throughout the basis period for that YA
- B.
Make an official application to surrender or claim an amount of adjusted loss for that YA
- C.
Have paid-up share capital in respect of ordinary shares of more than RM2.5 million at the beginning of the basis period for that YA
- D.
Fulfill all the above conditions
- 11.Failure of an employer to give notice to the Director General of Inland Revenue in respect of the following event would likely result in a fine of RM200 to RM20,000:-
- A.
Commencement of employment of an individual who is not likely to be chargeable to tax
- B.
Cessation of employment of an employee whose subsequent employer is a rival competitor
- C.
Temporary absence of an employee from Malaysia for a period of 3 months
- D.
None of the above
- 12.Which of the following is an offence under the Income Tax Act, 1967?
- A.
Failure of an individual to keep records of his overseas travelling
- B.
Failure of an individual to give notice of chargeability upon commencement of employment
- C.
Failure of an employer to comply with a direction to deduct tax
- D.
All of the above
- 13.After submitting her 2017 return form before the due date 30 June 2018, Ms Tan submitted an amended tax return for the year of assessment 2017 on 10 August 2018 which resulted in an additional tax payable of RM500. What would be the amount payable inclusive of penalties, if any?
- A.
RM500.00
- B.
RM550.00
- C.
RM575.00
- D.
RM577.50
- 14.An audit was conducted on the business premises of Mr Tan. He was asked to give the name and address of the person who prepared his income statement and statement of affairs. However, Mr Tan did not give a reply as he wanted to protect his friend. Mr Tan can be charged in court and if found guilty he is liable to a fine of:-
- A.
RM200 - RM20,000
- B.
RM1,000 – RM20,000
- C.
RM1,000 - RM10,000
- D.
None of the above
- 15.Which of the following payment(s) made to a non-resident person by a Labuan company are not subject to withholding tax?
- A.
Royalties
- B.
Management and technical fees for services rendered in Malaysia
- C.
Interest on loan provided by its holding company which is located overseas
- D.
All of the above
- 16.Which of the following statements is true?
- A.
A Labuan company (LC) is given an irrevocable election on whether to be charged to tax in accordance with the Income Tax Act, 1967
- B.
A LC carrying on Labuan non-trading activities is not taxable and is not required to file any statutory declaration
- C.
Labuan trading activity includes shipping, banking, insurance, trading, management or any other similar activity
- D.
All of the above
- 17.TSY Sdn Bhd is a company set up in Malaysia to manufacture a promoted product. The company began its operations 3 months ago and it is expected that capital expenditure of RM50 million would be incurred on factories, plant and machinery in the next 5 years to build and expand its operations. Projected profit for the initial years would be low due to high capital investments and cost penetration strategy to gain market share. In order to maximise tax-exempt income, which of the following incentive should the company apply for?
- A.
Pioneer status
- B.
Investment tax allowance
- C.
Reinvestment allowance
- D.
Infrastructure allowance
- 18.Which of the following expense is eligible for double deduction claim?
- A.
Remuneration of employees for the period they were hospitalised
- B.
Payment for services of a contract research and development company
- C.
Leave passage provided to disabled employees
- D.
None of the above
- 19.There are some conditions for a person to qualify for initial allowance in respect of an industrial building except I. he incurred capital expenditure on the construction of a building II. he incurred capital expenditure on the purchase of a building III. he was the owner of the building at the end of the basis period IV. the building was about to be used as an industrial building
- A.
I, II and III
- B.
I, III and IV
- C.
II and III
- D.
All of the above
- 20.Any unabsorbed capital allowance may be carried forward to be set off against (Note: there is no substantial change in shareholding)
- A.
Income of the following years from non-business source
- B.
Income of the following years from the same business source
- C.
Income of the following years from all business sources
- D.
Unabsorbed capital allowance cannot be carried forward
- 21.The operating lease payment of a new non-commercial motor vehicle started in January 2018. The cost of the motor vehicle in January 2018 was RM130,000. The total lease payments is RM160,000 over four years. The total lease payments that is deductible shall not exceed
- A.
RM160,000
- B.
RM130,000
- C.
RM100,000
- D.
RM50,000
- 22.The incorrect tax treatment for purchase of assets under a hire-purchase transaction is
- A.
To claim capital allowance on principal payments made during the year
- B.
To claim capital allowance on principal and interest payments made during the year
- C.
To expense off the interest payments
- D.
None of the above
- 23.Which statement is incorrect? I. Balancing allowance is the withdrawal of capital allowance previously claimed II. The balancing charge cannot be greater than the total amount of capital allowance claimed previously III. Upon disposal of an asset in a control transfer situation, we do not compute balancing charge/balancing allowance IV. Balancing charge/allowance is only computed where there is a sale proceed
- A.
I, II and III
- B.
II, III and IV
- C.
I and IV
- D.
All of the above
- 24.In the case of an investment holding company (not listed in Bursa Malaysia), permitted expenses include
- A.
Directors fees, audit, secretarial and tax fees
- B.
Rental of office, rental and maintenance of equipment, salaries and allowance
- C.
Audit and accounting fees, directors fees and tax fees
- D.
Management fees, telephone and postage charges, salaries and accounting fees
- 25.Bee Sdn Bhd has made a royalty payment to a Japanese company on 20 March 2018 in respect of royalty for the month of February 2018 charged in invoice dated 10 March 2018. When was the withholding tax due to be paid to the IRB on the above royalty payment?
- A.
One month from 20 March 2018
- B.
One month from 10 March 2018
- C.
One month from 28 February 2018
- D.
20 March 2018
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