Alam Damai Sdn Bhd (Alam Damai), a well-known restaurant, hired an expert from Australia, Mr Andrew, in order to advice on work process and to give guidance on ways to improve the equipment used by Alam Damai in their kitchen, starting from 1 July 2013. In order to perform the service, Mr Andrew will be spending around 80 days in Malaysia. Alam Damai will be paying RM200,000 to Mr Andrew in 2013. There is no double tax agreement between Malaysia and Australia. Alam Damai closes its accounts annually to 30 June. 2(a)(i) With regard to Mr Andrew By taking Mr Andrew resident status into consideration, discuss why the technical fee payable to him is derived from Malaysia 2(a)(ii) Discuss accordingly the tax mechanism and how much he will be taxed. 2(b)(i) With regard to Alam Damai Provide opinion on why fee payment made to Mr Andrew can be regarded as capital and revenue. 2(b)(ii) Alam Damai need to comply with certain tax requirement pertaining to the fee payment made to Mr Andrew, discuss on the following - Alam Damai do not comply with the tax requirement - Alam Damai comply with the requirement but not on specified time (but before submission of the tax return); and - Alam Damai only comply after due date for submission of the tax return.
Alam Damai Sdn Bhd (Alam Damai), a well-known restaurant, hired an expert from
Australia, Mr Andrew, in order to advice on work process and to give guidance on ways to
improve the equipment used by Alam Damai in their kitchen, starting from 1 July 2013. In
order to perform the service, Mr Andrew will be spending around 80 days in Malaysia. Alam
Damai will be paying RM200,000 to Mr Andrew in 2013.
There is no double tax agreement between Malaysia and Australia.
Alam Damai closes its accounts annually to 30 June.
2(a)(i) With regard to Mr Andrew
By taking Mr Andrew resident status into consideration, discuss why the technical
fee payable to him is derived from Malaysia
2(a)(ii) Discuss accordingly the tax mechanism and how much he will be taxed.
2(b)(i) With regard to Alam Damai
Provide opinion on why fee payment made to Mr Andrew can be regarded as
capital and revenue.
2(b)(ii) Alam Damai need to comply with certain tax requirement pertaining to the fee
payment made to Mr Andrew, discuss on the following
- Alam Damai do not comply with the tax requirement
- Alam Damai comply with the requirement but not on specified time (but before
submission of the tax return); and
- Alam Damai only comply after due date for submission of the tax return.
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