One of its contracts, which accounted for around 65 percent of its total yearly fees, was prematurely terminated during the year ending December 31, 2017. KWSB received RM450,000 in compensation, which is equal to two years' worth of fees under the contract
One of its contracts, which accounted for around 65 percent of its total yearly fees, was prematurely terminated during the year ending December 31, 2017. KWSB received RM450,000 in compensation, which is equal to two years' worth of fees under the contract
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Kwan Shalley Sdn Bhd (KWSB) is a contracting company that provides estate maintenance services. It had a total of 12 such contracts. One of its contracts, which accounted for around 65 percent of its total yearly fees, was prematurely terminated during the year ending December 31, 2017. KWSB received RM450,000 in compensation, which is equal to two years' worth of fees under the contract.
REQUIRED:
Explain whether the compensation received by KWSB is taxable under Income Tax Act 1967.
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