T2Q Rca22020 - Ei

KOLEJ UNIVERSITI TUNKU ABDUL RAHMAN
FACULTY OF ACCOUNTANCY, FINANCE & BUSINESS

ACADEMIC YEAR 2020/2021
BACHELOR OF CORPORATE ADMINISTRATION (HONOURS)
BBFT2033 MALAYSIAN TAXATION
Tutorial 2: Employment Income
Motorcars and related benefits – value assessable extracted from Public Ruling No. 11/2019
issued by the Inland Revenue Board.
Cost of car (when new) Annual value of BIK Fuel per annum
RM RM RM
Up to - 50,000 1,200 600
50,001 - 75,000 2,400 900
75,001 - 100,000 3,600 1,200
100,001 - 150,000 5,000 1,500
150,001 - 200,000 7,000 1,800
200,001 - 250,000 9,000 2,100
250,001 - 350,000 15,000 2,400
350,001 - 500,000 21,250 2,700
500,001 and above 25,000 3,000
When the car provided is more than five years old the taxable car benefit is halved but the value
of fuel provided remains unchanged. The value of driver provided is fixed at RM600 per month.
Other benefits RM
Gardener 3,600 per annum
Domestic servant 4,800 per annum
Household furnishings:
(i) Semi furnished with furniture in the lounge, dining room or
bedrooms: 840 per annum
(ii) Semi furnished (as above) and one or more of the following:
air conditioners, curtains, and carpet 1,680 per annum
(iii) Fully furnished with benefits as (i) and (ii) above and one or more
of: kitchen equipment, crockery, utensils and appliances 3,360 per annum
Question 1
(a) Explain briefly any THREE (3) differences in the tax treatments in respect of income
from employment (contract of service) and income from business (contract for service) in
Malaysia.
(b) Explain any THREE (3) circumstances where employments income is considered
derived from Malaysia
(c) In respect of employment income, identify any FIVE (5) types of benefits in kind that
are exempted from income tax.
Question 2
Mr. Tan is under employment as a manager with AB Sdn. Bhd. His income for the year ended
31.12.2020 are as follows:
Salary (whole year) RM180,000

Bonus (two months) RM 30,000
A car was provided to Mr. Tan for the whole year. It was bought by the company 3 years ago at
a cost of RM140,000. A driver was provided for the period from 1.4.2020 to 31.12.2020.
An unfurnished house was provided for the whole year. The rent paid by the employer is
RM2,500 per month.
Two local leave passages for Mr. Tan and his wife were provided by his employer in the year
2020. The total cost incurred by the employer was RM8,000.
Required:
Compute the gross income from employment for Mr. Tan for the Year of Assessment 2020.
Question 3
Kumar is employed by a Malaysian company and he is based in Petaling Jaya. His duties include
short visits to supervise the company’s operations in Singapore and Indonesia. Part of his
overseas supervision duties allowance is received in Malaysia. In addition, his annual bonus is
paid directly to his bank account in his home country, India.
Required:
Explain with reasons, whether the allowance and bonus is subject to Malaysian tax.
Question 4
Mr. Sunny is employed as a senior engineer with Light Sdn. Bhd. (LSB) His income for the year
ended 31.12.2020 are as follows:
RM
Salary (whole year) 240,000
Bonus (3 months) paid on 30.12.2020 60,000
Travelling allowance 12,000
Entertainment allowance 6,000
A car was provided to Mr. Sunny for use in work since 1.7.2020. It was bought by LSB 7 years
ago at a cost of RM210,000. No fuel was provided by the employer. A domestic maid was
employed by LSB at RM700 per month and provided to Mr. Sunny for the full year.
A fully furnished house was provided for the period 1.7.2020 to 31.12.2020. LSB paid RM2,600
for the monthly rent of the house (including RM600 for full furnishing). Mr. Sunny paid RM500
per month as token rent to his employer.
Two leave passages (overseas) were provided to Mr. Sunny by LSB in the year 2020.
The employer incurred RM2,000 to provide a leave passage to and fro Hong Kong, and
RM6,000 was for a leave passage to and from Canada.
In the course of performing his duty in the year 2020, Mr. Sunny spent RM9,000 in travelling and
RM8,000 in entertaining clients of LSB. He paid RM2,000 as subscription to the Board of
Engineers (an approved professional body) on 1.2.2020.
Required:
Compute the adjusted income from employment for Mr. Sunny for the Year of Assessment 2020.
Question 5
Mr. Kumaran is employed as a marketing manager of AA Marketing Berhad and his

remuneration package for the year ended 31 December 2020 is as follows:-
RM
Salary 120,000
Bonus 30,000
Petrol allowance for official duties 12,000
Meal allowance 7,200
Reimbursement of driver’s salary 12,000
Leave passages (i.e. for him and his family):
– Langkawi & Pulau Redang trips 6,000
– Bali 5,800
Unfurnished living accommodation (i.e. Victory Apartment) 48,000
Required:
Compute Mr. Kumaran’s gross employment income:
(i) based on the above information provided; and
(ii) based on the assumption that AA Marketing Berhad is the employer and provided
to Mr. Kumaran a driver as benefits-in-kind.

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KOLEJ UNIVERSITI TUNKU ABDUL RAHMAN

FACULTY OF ACCOUNTANCY, FINANCE & BUSINESS

Tutorial 2: Employment Income

Salary (whole year) RM180,000

Mr. Kumaran is employed as a marketing manager of AA Marketing Berhad and his

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