A company resident in Malaysia has entered into a contract to purchase medical equipment from Medix Co
Question:
A company resident in Malaysia has entered into a contract to purchase medical equipment from Medix Co Ltd (Medix), a company resident in Germany in March 2020. Medix supply equipment at cost of RM1,650,000. Under the terms of the contract, Medix will send its technical consultant to Malaysia to provide technical support pertaining to the use of the equipment. The technical consultant is expected to stay in Malaysia for a period of two months to provide consultation on installation work. In 16 September 2020, company credited an amount of RM 60,000 to Medix account in German for the payment of the technical consultant fees which includes the reimbursement of accommodation cost for the technical consultant team amounted to RM15,000. Required: State, with reasons, company withholding tax obligations in respect of the following payments made to Medix under the contract:
i. Payment for supply of medical equipment RM1,650,000. (1 marks)
ii. Payment for technical services of Medix's technical consultant comprising technical fees RM45,000 and accommodation expenses RM15,000. (2 marks)
iii. When is the last date for the company to remit the withholding tax to IRB and calculate the amount of withholding tax that should be remitted to Revenue Board?
Introduction to Probability and Statistics
ISBN: 978-1133103752
14th edition
Authors: William Mendenhall, Robert Beaver, Barbara Beaver