REQUIRED: For the abovementioned payments, state whether each of the following payments is subject to withholding tax. If your answer is 'Yes', state the type of income, calculate the amount of withholding tax and the due date to remit the withholding tax to the Inland Revenue Board of Malaysia (IRBM). If 'No', give reason. QUESTION 1 Yat Tom Yam Sdn Bhd is a Malaysian resident company that carries out the "Thai Bowl" business as a franchisee in Northern Malaysia. "Thai Bowl" branches are placed in several delis in hypermarkets and have a lot of fans from local and also tourists because of its signature Thailand original taste. "Thai Bowl" is owned and originated by Mr. Pranom the founder of Thai Bowl Ltd, a company registered in Thailand. The following are scenarios that happen in Yat Tom Yam Sdn Bhd as a franchisee: i. To use the "Thai Bowl" name, every year, Yat Tom Yam Sdn Bhd has to pay a royalty to Thai Bowl Ltd at the beginning of the basis period of the company which is every 1 March. The royalty is amounting to 3% of the previous annual sales that the company made. The company made about RM1.5 million in sales in the year 2022. ii. Apart from that, the company is obtaining the supply to produce "Thai Bowl" from Thai Bowl Ltd for the "secret recipes" and also from Thai Bowl's trusted suppliers, which most of the supplies are Thailand residents. In the year 2023, the company purchased the raw stocks from Thai Bowl Ltd amounting RM400,000 and other ingredients from Thai Halal Frozen Foods Ltd amounting to RM250,000. Thai Halal Frozen Foods Ltd will charge its customers 5% interest for the late payment of their supplies. Yat Tom Yam Sdn Bhd has not paid the other 20% of the supplies to both suppliers which is overdue and has to settle everything by 30 October 2023. iii. In order to deliver supplies to Malaysia, Thai Bowl Ltd charters a Trong Logistic truck from Bangkok to the headquarters of Yat Tom Yam Sdn Bhd in Alor Setar. Thai Bowl Ltd paid the truck company full payment in advance on 1 March 2023 amounting to RM55,000. On the other hand, Yat Tom Yam Sdn Bhd rent a cold storage in Malau, Kedah and its owner is a Thailand citizen, Ms Anong. The amount due that shall be settled by 1 November 2023 is RM10,000. iv. V. Yat Tom Yam Sdn Bhd is planning to expand its business to Penang hypermarkets. Thus the company agreed to sponsor a program organised by one of the hypermarkets in Penang, "Palestine: Our Hearts with You". This is to lobby the best spot to locate "Thai Bowl" at the hypermarket. "Palestine: Our Hearts with You" which was scheduled on 15 October 2023 invites Mr. Ottoman Ali Khan, from Qatar, as a religious preacher to deliver about Palestine. In the agreement, Yat Tom Yam Sdn Bhd is to pay an honorarium amounting to RM25,000 directly to Mr Ottoman Ali Khan on the day the event is held. Because of the intention of business expansion, Thai Bowl Ltd sent its officer, Mr Thanja (Thailand citizen) to one of the branches of Yat Tom Yam Sdn Bhd for quality assessment in early November. Yat Tom Yam Sdn Bhd has to pay technical services fees to Mr Thanja amounting to RM12,000 including a travel fare of RM1,000 and hotel accommodation for three days amounting to RM750. The services were wholly performed in Malaysia. The fees were credited on 7 November 2023.

REQUIRED: For the abovementioned payments, state whether each of the following payments is subject to withholding tax. If your answer is 'Yes', state the type of income, calculate the amount of withholding tax and the due date to remit the withholding tax to the Inland Revenue Board of Malaysia (IRBM). If 'No', give reason. QUESTION 1 Yat Tom Yam Sdn Bhd is a Malaysian resident company that carries out the "Thai Bowl" business as a franchisee in Northern Malaysia. "Thai Bowl" branches are placed in several delis in hypermarkets and have a lot of fans from local and also tourists because of its signature Thailand original taste. "Thai Bowl" is owned and originated by Mr. Pranom the founder of Thai Bowl Ltd, a company registered in Thailand. The following are scenarios that happen in Yat Tom Yam Sdn Bhd as a franchisee: i. To use the "Thai Bowl" name, every year, Yat Tom Yam Sdn Bhd has to pay a royalty to Thai Bowl Ltd at the beginning of the basis period of the company which is every 1 March. The royalty is amounting to 3% of the previous annual sales that the company made. The company made about RM1.5 million in sales in the year 2022. ii. Apart from that, the company is obtaining the supply to produce "Thai Bowl" from Thai Bowl Ltd for the "secret recipes" and also from Thai Bowl's trusted suppliers, which most of the supplies are Thailand residents. In the year 2023, the company purchased the raw stocks from Thai Bowl Ltd amounting RM400,000 and other ingredients from Thai Halal Frozen Foods Ltd amounting to RM250,000. Thai Halal Frozen Foods Ltd will charge its customers 5% interest for the late payment of their supplies. Yat Tom Yam Sdn Bhd has not paid the other 20% of the supplies to both suppliers which is overdue and has to settle everything by 30 October 2023. iii. In order to deliver supplies to Malaysia, Thai Bowl Ltd charters a Trong Logistic truck from Bangkok to the headquarters of Yat Tom Yam Sdn Bhd in Alor Setar. Thai Bowl Ltd paid the truck company full payment in advance on 1 March 2023 amounting to RM55,000. On the other hand, Yat Tom Yam Sdn Bhd rent a cold storage in Malau, Kedah and its owner is a Thailand citizen, Ms Anong. The amount due that shall be settled by 1 November 2023 is RM10,000. iv. V. Yat Tom Yam Sdn Bhd is planning to expand its business to Penang hypermarkets. Thus the company agreed to sponsor a program organised by one of the hypermarkets in Penang, "Palestine: Our Hearts with You". This is to lobby the best spot to locate "Thai Bowl" at the hypermarket. "Palestine: Our Hearts with You" which was scheduled on 15 October 2023 invites Mr. Ottoman Ali Khan, from Qatar, as a religious preacher to deliver about Palestine. In the agreement, Yat Tom Yam Sdn Bhd is to pay an honorarium amounting to RM25,000 directly to Mr Ottoman Ali Khan on the day the event is held. Because of the intention of business expansion, Thai Bowl Ltd sent its officer, Mr Thanja (Thailand citizen) to one of the branches of Yat Tom Yam Sdn Bhd for quality assessment in early November. Yat Tom Yam Sdn Bhd has to pay technical services fees to Mr Thanja amounting to RM12,000 including a travel fare of RM1,000 and hotel accommodation for three days amounting to RM750. The services were wholly performed in Malaysia. The fees were credited on 7 November 2023.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 5MAD

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