Guava Sdn Bhd (Guava), a company resident in Malaysia, is a wholly owned subsidiary of Pear...
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Guava Sdn Bhd (Guava), a company resident in Malaysia, is a wholly owned subsidiary of Pear Inc, a US resident entity. During Guava's year ended 31 March 2020, Pear Inc extended a loan of RM600,000 to Guava, to finance its new research and development centre in Malaysia. Interest is payable on this loan at an annual rate of 10% and the total interest payable to Pear Inc for the year ended 31 March 2020 was RM35,000. Required: (a) State, with reasons, why the interest income receivable by Pear Inc is derived from Malaysia. (b) Compute the withholding tax payable on the interest income of RM35,000, receivable by Pear Inc for the year ended 31 March 2020. (c) State the income tax implication for Guava Sdn Bhd if it bears the withholding tax amount (as calculated in (ii) above). Guava Sdn Bhd (Guava), a company resident in Malaysia, is a wholly owned subsidiary of Pear Inc, a US resident entity. During Guava's year ended 31 March 2020, Pear Inc extended a loan of RM600,000 to Guava, to finance its new research and development centre in Malaysia. Interest is payable on this loan at an annual rate of 10% and the total interest payable to Pear Inc for the year ended 31 March 2020 was RM35,000. Required: (a) State, with reasons, why the interest income receivable by Pear Inc is derived from Malaysia. (b) Compute the withholding tax payable on the interest income of RM35,000, receivable by Pear Inc for the year ended 31 March 2020. (c) State the income tax implication for Guava Sdn Bhd if it bears the withholding tax amount (as calculated in (ii) above).
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a The interest income receivable by Pear Inc is derived from Malaysia because the loan was extended ... View the full answer
Related Book For
Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1337491471
10th edition
Authors: Gary A. Porter, Curtis L. Norton
Posted Date:
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