Frozen Food Sdn Bhd paid a royalty for operating a franchised caf to a non-resident company amounting
Question:
Frozen Food Sdn Bhd paid a royalty for operating a franchised café to a non-resident company amounting to RM150,000 net of withholding tax on 1 July 2022. Frozen Food Sdn Bhd remitted 70% of the withholding tax to the IRB on 28 July 2022. The balance of the withholding tax was paid on 5 January 2023. Frozen Food Sdn Bhd has a financial year end of 31 December and the applicable rate of withholding tax is 10%.
Compute the withholding tax payable and the penalty, if any, payable by Frozen Food Sdn Bhd. State the amount of the payment in respect of the royalty which is deductible in arriving at the adjusted income of Frozen Food Sdn Bhd assuming that the full amount of withholding tax and the penalty, if any was paid.
d. Diamond Bhd, Malaysian tax resident company involve in producing electronics product for export, has hired Hokkaido Limited resident company in Japan for the transfer of technical assistance and supply and installation of equipment at its factory in Bandar Baru Bangi. In 2022, Diamond Bhd has credited an amount to Hokkaido Limited as below:
Technical service fees) | RM80,000 | Payment was made on 15 May 2022 |
Supply of equipment from Hokkaido Limited | RM650,000 | Payment was made on 27 July 2022 |
Installation of the equipment | RM 89,000 | Payment was made on 29 September 2022 |
Explain with reasons, whether each of the above stated amounts is subject to withholding tax and where applicable state the amount to be remitted to tax authority together with the due date of the remittance.
Introduction To Federal Income Taxation In Canada
ISBN: 9781554965021
33rd Edition
Authors: Robert E. Beam, Stanley N. Laiken, James J. Barnett