CORPORATE TAXATION

Dynamos Detergents Sdn Bhd is a manufacturer of household detergents. It obtained the ingredients for its products from various suppliers. In 2024, the company discovered that some items of a component from one of its distributors did not meet its required specifications. It made a claim against the supplier. The supplier paid a sum of RM75,000 to the company in order to maintain goodwill.

Required:

Advice on whether the receipt of RM75,000 is subject to tax.

• Yes, subject to tax

• No, not subject to tax.

Answer explanation

page 195

A company made an advance of RM2,000 to one of its salesmen which to be set off against his future commissions. It was customary to give such advances to meet entertainment and travelling expense. The salesman disappeared without settling the advance. The advance had to be written off by the company.

Advice the tax treatment of the following losses or expenditure.

• Deductible expense

• Non deductible expense

Answer explanation

page 226

Fazrina is an accounting clerk in Kidzania Sdn Bhd. The manager noticed that three cheques were missing during the year 2024. It was discovered that Fazrina had cashed the cheques with forged signatures of the manager and misappropriated RM12,000 over a period of 4 months. She was dismissed.

Advice the tax treatment of the following losses or expenditure.

• Deductible expense

• Non deductible expense

Answer explanation

page 226

Allowable expenses for rental income are as follows, except;

• Interest on loan borrowed

• Quit rent and assessment

• Fire insurance

• Renovation on building

Answer explanation

Capital expenditure

Dividend received from Amanah Saham Wawasan is best allocated under section?

• Section 4(c)

• Section 4(d)

• Section 4(b)

• Section 4(a)

Which of the following is typically considered a non-deductible expense for company?

• Interest expense

• Depreciation

• Cost of goods sold

• Repairs and maintenance

Which Section of the Income Tax Act 1967 below prescribes the prohibited deductions?

• Section 39

• Section 33

• Section 36

• Section 32

Which of the following “entertainment” is not tax deductible?

• Aladdin Sdn Bhd’s annual dinner for staff.

• Jasmine Travel Sdn Bhd gives out souvenirs, bags and travel ticket to visitors at trade fairs.

• Aladdin Sdn Bhd gives free samples of its candles to guests at the launch of its new therapeutic

  candles.

• Aladdin, after discussing his business proposal with his prospective client Jasmine, takes her and

  her assistant out for dinner at Genie Restaurant.

Which of the following is typically considered a deductible expense for company?

• domestic or private expense

• provision of warranty

• statutory audit fees

• income tax appeal

Which of the following expenses is not eligible for a double deduction claim for a company?

• promotion of export

• employment of disabled employees

• advertising expenses on Malaysian brand names

• initial registration of trademark in Malaysia