Line Sdn Bhd (LSB), a resident manufacturing company located in Bangi Industrial Park, Selangor since year...

  

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Line Sdn Bhd (LSB), a resident manufacturing company located in Bangi Industrial Park, Selangor since year 2005. In year 2013, the company embarks on a joint-venture business to produce promoted product and granted with pioneer status. The company in the year 2018 expanded its business by constructing new factory building which attached to the existing factory building. With the new business capacity, the production was increased by 60%. Relevant information pertaining to the company is as follows: 2018 2019 2020 RM000 RM'000 RM'000 Adjusted income/(loss) Capital allowances 450,000 44,000 150,000 220,000 65,000 58,000 Interest income 5,000 7,000 9,000 Approved donations 1,000 500 1,500 Capital expenditure (Note) Construction of factory building Hi- tech machinery 10,500 16,000 8,500 11,200 Motor vehicles 180 Office equipment 500 700 Note: The capital expenditures were incurred in relation to the business expansion program. Required: i Determine whether LSB is eligible to apply for reinvestment allowance under Schedule 7A, Income Tax Act 1967 (as amended). Compute the chargeable income and amount to be credited to exempt income account for the new investment incentive in the year 2018 to 2020. i. Line Sdn Bhd (LSB), a resident manufacturing company located in Bangi Industrial Park, Selangor since year 2005. In year 2013, the company embarks on a joint-venture business to produce promoted product and granted with pioneer status. The company in the year 2018 expanded its business by constructing new factory building which attached to the existing factory building. With the new business capacity, the production was increased by 60%. Relevant information pertaining to the company is as follows: 2018 2019 2020 RM000 RM'000 RM'000 Adjusted income/(loss) Capital allowances 450,000 44,000 150,000 220,000 65,000 58,000 Interest income 5,000 7,000 9,000 Approved donations 1,000 500 1,500 Capital expenditure (Note) Construction of factory building Hi- tech machinery 10,500 16,000 8,500 11,200 Motor vehicles 180 Office equipment 500 700 Note: The capital expenditures were incurred in relation to the business expansion program. Required: i Determine whether LSB is eligible to apply for reinvestment allowance under Schedule 7A, Income Tax Act 1967 (as amended). Compute the chargeable income and amount to be credited to exempt income account for the new investment incentive in the year 2018 to 2020. i.

Answer rating: 100% (QA)

i Reinvestment Allowance is a special tax incentive available to a company resident in Malaysia which a has been operational for not but 36 months and ... View the full answer