ASSIGNMENT 7-3 Encik Danial and Puan Damia are resident in Malaysia for year basis 2010.

The income are : Encik Danial Business Dividend ( net ) Rental Puan Damia Business Dividend ( net ) Salary RM 45,000 3,600 42,000 RM 51,000 1,800 28,000

Additional Information a) In year basis 2010, they were donated to improved institutions : Encik Danial Puan Damia = = RM2,500 RM2,000

b) Puan Damia paid up RM200 per month for education insurance c) EPF 11% d) Encik Danial currently pursuing his studies in Bachelor of Business Administration at University Utara Malaysia as a part time student. The education fees are RM2,500. For his reading sources about RM1,000 a year. e) They have two children. The first child is studying at University Utara Malaysia and the second at Kolej Matrikulasi Sains Pulau Pinang.

REQUIRED Determine Encik Daniels and Puan Damias tax liability for the year of assessment 2010 after considering the relief available under the Income Tax Act 1967 if : a) They take the separate Assessment or b) They take the Joint Assessment

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Answer a) Separate Assessment Encik Danial Section 4 (a) Business Section 4 (b) Salary Section 4 (c) Dividend - Encik Danial ( RM3,600/ 0.75) -Puan Damia ( RM 1,800/ 0.75) Section 4 (d) Rental AGREGATE INCOME (-) Donation TOTAL INCOME (-) Personal Relief Tax Payer Education Insurance (RM200 x 12) Education Fees Children First child - Second child Reading Resources EPF (28,000 x 11%) CHARGEABLE INCOME 71,800 2,500 4,000 1,000 1,000 3,080 64, 920 2,400 91,800 ( 2,500) 89,300 81,400 (2,000) 79,400 4,800 42,000 2,400 28,000 45,000 51,000 Puan Damia

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b) Joint Assessment Encik Danial Section 4 (b) Salary Section 4 (c) Dividend - Encik Danial ( RM3,600/ 0.75) - Puan Damia ( RM 1,800/ 0.75) Section 4 (d) Rental AGREGATE INCOME (-) Donation TOTAL INCOME TOTAL INCOME COMBINATION (-) Personal Relief Tax Payer Spouse Education Insurance (RM200 x 12) Education Fees Children First child - Second child Reading Resources EPF (28,000 x 11%) CHARGEABLE INCOME (9,000) 3,000 2,400 2,500 4,000 1,000 1,000 3,080 142,720 42,000 91,800 ( 2,500) 89,300 168,700 81,400 (2,000) 79,400 4,800 2,400 28,000 Puan Damia

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ASSIGNMENT 7-6

a) Upon graduation, you are still single has entered the world of work in a private company and the remuneration package offered for the following year of assessment 2010. Package 1 Gross monthly salary of RM2,000 Month salary bonus RM800 per month car allowance Package 2 Gross monthly salary of RM2,000 Monthly salary bonus Using a car company that has an annual value of RM1, 200 and the annual oil RM600 Living in a house provided with fully furnished. The annual value of furniture also is RM280 per month. The annual value of residential property is RM24, 000. Only the actual demands of entertainment expenses amounting to RM4, 000.

Housing allowance of RM1, 000 per month

Entertainment allowance of RM600 per month

ADDITIONAL INFORMATION EPF contribution is 11%. Since you have knowledge of taxation, then you will want to choose the appropriate work packages with a view to minimizing the tax burden without a detrimental impact on your maintenance.

You are required to choose between Package 1 or Package 2 above that can fulfill your wishes. b) Companies that serve you intend to provide benefits to its staff to be more diligent work without any increase in taxes must be paid by the staff. Director of knowing you have knowledge in taxation, he would like to ask your opinion on how that can be used to achieve these aspirations. You are required to provide FIVE (5) how companies can benefit without any additional staff in the tax payable by the staff.
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(a) Package 1 : Tax payable for the year assesment 2010

RM SECTION 4(B): Salary Bonus Allowance-car -accommodation -entertainment AGGREGATE INCOME (-) relief : self EPF & life insurance CHARGEABLE INCOME (8000) (2640) 44,160 24,000 2000 9600 12,000 7200 54,800

1st RM 35,000 Next RM 9160 x 12% TAX PAYABLE

1525 1099.20 2624.20

Hak Milik Sant Sahabat dan Kawan-Kawan. Dibenarkan untuk tujuan pembelajaran sahaja

Package 2 : Tax payable for the year assesment 2010

RM SECTION 4(B) : section 13(1) (a) Salary Bonus Entertainment allowance section 13(1) (b) Furniture Car section 13(1) (c) Accommodation i- 30,000 x 30% = 9000 ii- 24,000 AGGREGATE INCOME (-) relief : self EPF & life insurance CHARGEABLE INCOME (8000) (2640) 32,920 43,560 9000 3360 1200 24,000 2000 4000

1st RM 20,000 Next RM 12,920 x 7% TAX PAYABLE

475 904.4 1379.4

Package 2 should be choose because the tax payable are lower than package 1.

Hak Milik Sant Sahabat dan Kawan-Kawan. Dibenarkan untuk tujuan pembelajaran sahaja

(b) How companies can provide a benefits to staff without any increase in tax payable : Provide more facilities to the workers such as bonus, computer, and education. Suggest staff to make a joint assessment to reduce a tax payable. Provide compensation to the worker who have done their services. Ensure that the worker are residental of Malaysia.

Hak Milik Sant Sahabat dan Kawan-Kawan. Dibenarkan untuk tujuan pembelajaran sahaja

ASSIGNMENT 7.9 Every tax payer has their right to minimize their taxes legally under Income Tax Act 1967. The good tax payer will plan the strategies in making the payment of their taxes with conscientious.

a) What are the purposes for a tax payer to make tax planning? Tax planning is a series of measures taken by a taxpayer to manage his income sources with the objectives of eliminating, minimizing or deferring tax but within the ambit of tax legislations. Such transactions have to be commercially justified in order to avoid the invocation of anti avoidance section by IRB.

b) What does it means with Tax Evasion and its impacts besides law and states FIVE situation that could be perceived as evade as stated in Section 114 Income Tax Act 1967? Tax evasion is a Illegal activities by taxpayer to reduce the tax liability ( tax payable ). Includes the failure to declare the incomes, misrepresent, alter fraudulently and etc.

Five situations :

Run from paying taxes. Helping tax payers fled. Not to submit the income statement. Helping tax payers fled. Do not want to pay taxes. Tax payers leaving Malaysia without to pay taxes.

Hak Milik Sant Sahabat dan Kawan-Kawan. Dibenarkan untuk tujuan pembelajaran sahaja

c) State four ways on how a new company can plan to minimize their tax liability under Income Tax Act 1967.

Need to give bonuses to employees.

Provide laptops to employees .

Giving allowances to employees.

Give EPF

Hak Milik Sant Sahabat dan Kawan-Kawan. Dibenarkan untuk tujuan pembelajaran sahaja