WorksheetsMalaysian Tax System Quiz
Total questions: 16
Worksheet time: 8mins
The Income Tax Act 1967 is an act to tax income: that is why capital gains are not taxable under the said Act.
True
False
Sometimes false
Sometimes true
Which one of the following statement is incorrect?
Statute laws are enacted by parliament and contained in statute.
Case laws are enacted laws created by the decisions of courts.
Public rulings is issued by the DGIR
Advance rulings are requested by a taxpayer from DGIR
Which one of the following statement is not true?
Taxpayers may challenge the IRB practices or rulings.
Case laws are not binding on the Malaysian courts.
Public rulings are binding on the IRB tax officers and taxpayers.
Advance rulings are binding on the DGIR and taxpayers.
Which of the following statements is NOT true? (1) Tax evasion is the deliberate or wilful act to reduce the tax liability by illegal means (2) The Malaysian revenue legislation contains both specific and general anti-avoidance provisions (3) Where the Director General of Inland Revenue exercises his powers under the anti-avoidance provisions to vary a transaction for the purposes of income tax, the Director General of the Royal Customs Department is deemed to have exercised his powers to have varied the transaction in a similar manner
1 and 2
1 and 3
3 only
2 only
Which one of the following statement is TRUE?
The Malaysian tax system is broadly based on a world income scope basis
Resident companies carrying on business of banking, insurance, shipping and air transport are assessed on a territorial basis, that is, wherever the income is derived
The Malaysian tax system is broadly based on a territorial scope with exemption given on remittances of foreign source of income by non-resident person
Chargeable person other than resident companies carrying on specialised business shall be charged to tax on a world scope basis
In resolving tax issues or disputes Director General of Inland Revenue Board and the courts apply sources of revenue law and legal principles. Which of the following statements are true? (i) Statute law are enacted by parliament and contained in statute, for example Real Property Gains Tax Act 1976 (ii) Public rulings issued by the Director General of Inland Revenue Board is an interpretation of tax laws (iii) Advance rulings are binding on the taxpayer (applicant) and the Director General (iv) Case laws are enacted laws created by the decision of the courts and are binding on the Malaysian courts
i, ii, iii
i, ii, iv
i, iii, iv
ii, iii, iv
Which of the following is NOT a source of Malaysian revenue law?
Acts passed by Parliament
Orders and Regulations made by Ministers as empowered by the Act
Internal memos issued by the Director General of the Inland Revenue Board to Inland Revenue Board officers
Case law created by decisions of the Malaysian courts
Which one of the following statement is true?
Income tax, import duty and real property gains tax are direct tax.
Income tax, stamp duty and real property gains tax are direct tax.
Sales tax and services tax, stamp duty and custom duties are indirect tax.
Sales tax and services tax, stamp duty and import duty are indirect tax.
Which of the following statements is correct?
Malaysia imposes both direct and indirect taxes on business
Malaysia does not impose tax on any kind of capital gain
Income tax is an example of an indirect tax
Companies which register for sales tax and services tax enjoy a lower rate of corporate income tax
Which of the following statements is INCORRECT in relation to a company applying for an advance ruling from the Director General of Inland Revenue (DGIR)?
A company can apply for an advance ruling even if the arrangement to be undertaken is not seriously contemplated
A company cannot rely on an advance ruling if the actual arrangement is materially different from the arrangement stated in the advance ruling
A company must pay a prescribed fee to the DGIR for the application for an advance ruling
A company will not be given an advance ruling if the transaction is based on a hypothetical situation
Which of the following statements are CORRECT in the context of the Malaysian tax system? (1) The tax authority is empowered to impose penalties where necessary (2) A partnership is a taxable person for income tax purposes
1 and 3 only
2 and 3 only
1 and 2 only
1, 2 and 3.
Which of the following statements is FALSE in respect of the role taxation plays in a modern economy?
Taxation is set with the aim of meeting revenue related objectives and not for any non-revenue related objectives
Indirect taxes such as import duties and customs duties can be used to control imports of goods and encourage domestic production of goods and thus, substitute imports
It is common for taxes to be increased during a period when the economy is booming and to be reduced, or payment obligations to be deferred, during an economic depression
To encourage research and development (R&D) activities in Malaysia, double deduction for approved R&D expenses is provided to companies as a tax incentive
Which of the following statements is / are TRUE in respect of the different categories of direct taxes? (1) A tax is progressive if the average percentage rate of tax collected increases as income increases (2) A tax is proportional if the rate of tax remains constant regardless of the income generated (3) A tax is regressive if the average percentage rate of tax collected decreases as income decreases
3 only
2 and 3 only
1 and 2 only
1, 2 and 3
Which of the following items correctly fall within the scope of taxation in Malaysia? (1) If a manufacturing company disposes of a factory building which it has used for its manufacturing business in Malaysia, capital gains tax under the Real Property Gains Tax Act, 1976 (as amended), is applicable on the gain arising on the disposal of the factory building (2) If a manufacturing company disposes of a factory building which it has used for its manufacturing business in Malaysia, income tax under the Income Tax Act, 1967 (as amended), will apply on any balancing charge that may arise on the disposal of the factory building if a claim for industrial building allowance has been made by the company (3) If a manufacturing company disposes of a factory building which it has used for its business in Vietnam, income tax under the Income Tax Act, 1967 (as amended), is applicable on the remittance of such proceeds into Malaysia
1 only
3 only
1 and 2
2 and 3
Which of the following are sources of revenue law in Malaysia? (1) Orders and regulations prescribed by the Minister (2) Case decisions made by the Malaysian courts on tax matters (3) Guidance notes issued by the Inland Revenue Board (IRB) and the Royal Malaysian Customs
2 and 3 only
1 and 3 only
1 and 2 only
1, 2 and 3
Which of the following statements, in relation to a good tax system in Malaysia, are TRUE? 1. The system should predict the amount of income tax payable with reasonable accuracy and certainty 2. The system should be simple and understandable with fair and non-arbitrary administration 3. The system should tax those with different income levels at the same rate
1 and 2 only
2 and 3 only
1 and 3 only
1, 2 and 3
