Question: Question 2 DA Distributors Sdn Bhd acts as a distributing agent for a number of chemical manufacturers. It has recently entered into an agreement with

Question 2

DA Distributors Sdn Bhd acts as a distributing agent for a number of chemical manufacturers. It has recently entered into an agreement with Kimica Sdn Bhd to act as its distributing agent for a period of five years. The agreement was cancelled after two years by Kimica Sdn Bhd and DA Distributions Sdn Bhd received a sum of RM60,000 as compensation for the cancellation of the agreement.

Required

State with reasons, whether the compensation received by the Company is taxable.

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