Malaysian Taxation on Residence Status.

Only available on StudyMode
  • Topic: 2008, 1920, 1918
  • Pages : 6 (1542 words )
  • Download(s) : 79
  • Published : July 5, 2011
Open Document
Text Preview
TAX320
RESIDENT STATUS
1. Section 7 (1) (a)
* 182 or more days of which the period of stay need not be consecutive. * Ex:

DATE| PLACE| DAYS|
1.3.05 – 30.6.05| Malaysia| 122|
1.7.05 – 31.7.05| Seminar – HK| 31|
1.8.05 – 30.9.05| Malaysia| 61|

Answer: 183 days - Resident by virtue of S.7 (1) (a) of ITA 1967. Reasons: * In Malaysia more than 182 days.
* S.7 (1) (a) does not require the 182 days or more to e consecutive.

2. Section 7 (1) (b)
* An individual is in Malaysia in basis year for the period of less than 182 days and that period is linked by or to another period of 182 days or more consecutive days. * Temporary absence: not in Malaysia, but IRB consider or assume that we are in Malaysia due to 3 circumstances.

* Due to work, service, seminar, conference or study abroad. * Ill health: myself and immediate family; parents, spouse, children. * Social visit not more than 14 days.

* Ex1:
|------------------------------|-----------------------------|-----------------------------|
1.1.08 31.12.08/1.1.09 31.12.09/1.1.10 31.12.10

Resident for YA 2009, because it is linked to another period which is 2008 that is more than 182 days consecutively.

* Ex2:
YEAR| DATE| DAYS|
2004| 1.7.04 – 31.12.04| 184|
2005| 1.1.05 – 31.1.05| 31|

Resident for YA 2005 under Section 7 (1)(b) as period less than 182 consecutive days in 2005 ‘linked by’ more than 182 consecutive days in 2004. * Ex3:
YEAR| DATE| DAYS|
2004| 1.7.04 – 28.12.04| 180 days|
| 29.12.04 – 31.12.04| 3 days social visit|
2005| 1.1.05 – 12.1.05| 12 days social visit|
| 13.1.05 -31.1.05| 19 days|

Answer: Non-resident for YA 2005 under S.7 (1) (b). It is less than 182 days and linked with 182 consecutive days but the social visit exceeds more than 14 days limit. * Ex4:
YEAR| DATE| DAYS|
2004| 31.12.04| 1 day|
2005| 1.1.05 – 31.3.051.4.04 – 2.4.053.4.05 – 19.6.0520.6.05 – 1.7.05| 90 days2 days78 days12 days|

Answer: Resident for YA 2004 under S.7 (1) (b). Year 2004 is less than 182 days and linked to 182 consecutive days with the social visit of 14 days.

3. Section 7 (1) (c)
* In Malaysia more than 90 days or more (not necessarily consecutive) and was either resident or in Malaysia for 90 days or more in 3 out of the 4 immediately preceding basis years. * Ex:
YEAR| DAYS| STATUS|
2005| 70| NR|
2006| 80| NR|
2007| 90| NR|
2008| 40| NR|
2009| 90| NR|
NR for YA 2009 because the 3 out of 4 immediately preceding years are less than 90 days and the status for those years are NR.

* Ex for S.7 (1)(a) – S.7 (1) (c)

DATE| DAYS| STATUS| SECTION|
1.3.2001 – 20.3.2001| 20| NR| Not more than 182 days.| 1.5.2002 – 15.8.2002| 107| NR| Not more than 182 days.| 1.1.2003 – 30.9.2003| 273| Resident| S.7 (1) (a)| 1.3.2004 – 31.10.2004| 245| Resident| S.7 (1) (a)| 1.1.2005 – 20.4.2005| 110| Resident| S.7 (1)(c)|

4. Section 7 (1) (d)
* Resident for the 3 immediately preceding basis years and for the immediately following years.

* Ex:

DATE| DAYS| STATUS| SECTION|
11.10.01 – 31.12.01| 82 days| R| S.7 (1)(b)|
2002| Whole year| R| S.7 (1) (a)|
1.1.03 – 30.9.03| More than 182 days| R| S.7 (1) (a)| 1.4.04 – 4.4.04| 4 days| R| S.7 (1) (d)|
1.4.05 – 31.12.05| More than 182 days| R| S.7 (1) (a)|

Benefit of residence status in Malaysia:
1. Rate for residence is between 0% - 26% and rate for non-residence is 26% flat rate. 2. Individual tax relief (S.46 to S.50)
3. Rebate if their chargeable income is less than RM 35 000.

PAST YEARS QUESTION
APRIL 2011 Q1 (a)

Chow Sin Chai...
tracking img