Question

In: Accounting

Kenneth, a Malaysian citizen was operating a restaurant in Japan since 1998. During the period 1998...

Kenneth, a Malaysian citizen was operating a restaurant in Japan since 1998. During

the period 1998 to 2006, Kenneth was never in Malaysia. Since 2007, Kenneth have

been returning to Malaysia frequently to attend to some family affairs and it was established that Kenneth was a Malaysian tax resident for the basis years 2007 to 2009.

In 2014, Kenneth sold his restaurant in Japan. He was recruited into the Malaysian Civil Service at the Ministry of Foreign Affairs from 01 November 2013. He was posted to the Malaysian Embassy in Tokyo from 01 December 2013.

Kenneth left for Tokyo on 29 November 2013 and reported for duty on 01 December 2013. Since then Kenneth has never been back to Malaysia.

Below are the patterns of Kenneth’s duration of stay in Malaysia since 2010:

01 March 2010 to 31 March 2010

01 May 2011 to 31 January 2012

01 April 2013 to 15 May 2013

01 October 2013 to 28 November 2013

During the period Kenneth was not in Malaysia, he was in Japan.

Required:

For the purposes of Malaysian income tax, determine Kenneth’s residence status for the basis years 2010 to 2014.

Support your answers with reasons and citing the relevant provision of the Income Tax Act 1967 that is applicable for a particular year of assessment and also explain why certain sub-sections of section 7(1) are not applicable for any particular year of assessment.

P/S : THE ANSWER WILL BE IN TABLE . EXAMPLE WILL BE IN THE BELOW . THANK YOU~

Year

Total days present in Malaysia

Status

RESIDENT OR NON RESIDENT

Section

Section 7(1)(A),Section 7(1)(B), Section 7(1)(C)

Explanation

2014

181 Days

Non resident

Section 7(1)(A)

Renuka is not considered as the resident of Malaysia for tax purposes as she had lived in Malaysia for 181 days only in 2014.

THANK YOU SO MUCH FOR YOUR HELP .

Solutions

Expert Solution

Year Total Days Present Status   Section Explanation

2010 31 Days Resident 7(1)(d)    Kenneth is considered to be a resident of Malaysia for tax purposes as he has:-

  •   He is resident for the immediately following basis year; and
  •   Had been resident for the 3 immediately preceding basis years(2007-2009)

2011 245 Days Resident 7(1)(a) Kenneth is considered to be a resident of Malaysia for tax purposes as he has been residing in malaysia for more than 182 Days.

2012 31 Days Resident 7(1)(b) Kenneth is considered to be a resident of Malasyia for tax purposes as he is in Malaysia in that basis year for a period of less than one hundred and eighty-two days and that       period is linked by or to another period of one   hundred and eighty-two or more consecutive days throughout which he is in Malaysia in the basis year for the year of assessment immediately preceding that particular year of assessment or in that basis year for the year of assessment immediately following that particular year of assessment.

2013 104 Days Resident 7(IB) Kenneth is considered to be a resident of Malasyia for tax purposes as he is service of a statutory authority

  (Foreign ambassador) and is exercising his employment outside Malaysia.(Japan)

2014 0 Days Resident 7(IB) Kenneth is considered to be a resident of Malasyia for tax purposes as he is service of a statutory authority

  (Foreign ambassador) and is exercising his employment outside Malaysia.(Japan)


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