TAX 1: Pre Post Test Basis of Malaysia Income Tax System

What is the primary purpose of taxation in Malaysia?

• To penalize high-income earners

• To generate revenue for government operations and public services

• To discourage foreign investment

• To increase business profits

Under which section of the Income Tax Act 1967 are the classes of income defined?

• Section 3

• Section 4

• Section 7

• Section 8

What is the flat tax rate for non-residents in Malaysia?

• 25%

• 28%

• 30%

• 35%

How many days must an individual be physically present in Malaysia to qualify for tax residency under Section 7(1)(a)?

• 90 days

• 182 days

• 265 days

• 365 days

Which of the following is NOT a class of income under Section 4 of ITA 1967?

• Business income

• Employment income

• Capital gains

• Rents and royalties

Why is determining residence status important for Malaysian taxation?

• It only affects foreign workers

• It determines eligibility for tax reliefs and the applicable tax rates

• It only matters for business income

• It affects citizenship status

How does the linking period rule work under Section 7(1)(b)?

• It requires 365 consecutive days in Malaysia

• It connects a period less than 182 days to another 182 consecutive days in adjacent years

• It only applies to foreign workers

• It requires 90 days in three consecutive years

Which statement best describes indirect taxes in Malaysia?

• They are paid directly to the government by individuals

• They are only applicable to businesses

• They are levied on goods and services and collected through intermediaries

• They are only collected annually

How does temporary absence provision affect tax residency?

• It automatically disqualifies residency status

• It is treated as part of the period of stay in Malaysia

• It only applies to business travelers

• It requires additional tax payments

What distinguishes direct taxes from indirect taxes in Malaysia?

• Direct taxes are optional while indirect taxes are mandatory

• Direct taxes are paid directly by the taxpayer to the government while indirect taxes are collected through intermediaries

• Direct taxes only apply to corporations

• Indirect taxes are only for luxury items