MSB Sdn Bhd (MSB) purchased some plant and machinery from Micro Pte. Ltd (MPL), a non resident company for its factory in Shah Alam. The agreement provides for a non resident employee of MPL to carry out the installation and render related consultancy services to MSB in Shah Alam. The amounts stipulated in the agreement are an installation fee of RM65,000 and a consultancy fee of RM315,000. The installation fee was paid on 1 March 2019 and for the consultancy fee, both parties agreed to contra in their ledgers a sum of RM126,000 to be adjusted on 1 June 2019. The balance of the consultancy fee of RM189,000 was paid on 15 August 2019.

MAC Sdn Bhd engaged the service of Maggie, a non-resident designer for a fee of RM100,000. The work was prepared in Appleland, another country and sent by courier to Kuala Lumpur. The fee was paid on 4 March 2019.

A non-resident consultant, Michael was engaged to conduct training for a fee for RM130,000. Michael stay in Kuala Lumpur for two weeks to conduct hands-on training at Pan Pacific Hotel.

Required:

Evaluate whether tax needs to be withheld by MAC in respect of the services rendered by Maggie and Michael.

Answer rating: 100% (QA)

The fees paid to Maggie and Michael are considered taxable income in Malaysia This is bec... View the full answer