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Tax Implications of Proposed Residency Status Changes at SOAREX SDN BHD

Delve into the effects of proposed changes in residence status on SOAREX SDN BHD to identify potential tax fraud issues and their impact. Explore the company’s background, nature of operations, and the implications of proposed residency status alterations on income computations and tax treaties.

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Tax Implications of Proposed Residency Status Changes at SOAREX SDN BHD

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  1. SOAREX SDN BHD Presenter : Hazwani Hanis Mohamed

  2. A Developed Case Study • Question to deliberate: • What are the effect of this proposals? • Are there any tax fraud issues?

  3. Company Background SOAREX SDN BHD Nature : Advertising, designing and film production Location : 14 countries (Asia Pasific & Europe)

  4. 3 Cinematographers

  5. The Proposals

  6. Residence Status • As an examples : • Period I 1.1.2009 – 30.03.2009 = 90days • Period II 1.5.2009 – 25.07.2009 = 86days • Period III 1.8.2009 – 28.10.2009 = 89days • Total number of days : 265 days • YA 2009 : Resident by virtue of Sec 7 (1)(a)

  7. The Impact :

  8. Computation - Residence RM • Salary 24,000 Entertainment allowance 72,000 Gross employment income 96,000 Less: Expenses Entertainment (3,200) Loan payable (1,000) Adjusted income 91,800

  9. Computation - NR RM Salary 24,000 Entertainment allowance 72,000 Gross employment income 96,000 • Not entitled to claim, any personal relief

  10. Other Countries Legislations

  11. Other Countries

  12. Any fraud issues? Tax Treaties Double Taxation Limit right to tax certain sources of income – depends on resident status taxation agreement Certain tax provisions considered income in two countries – to minimise fiscal evasion.

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