The ACCA Easy Guide to Taxation for Employees published last week drew a deluge of queries. This is the first of a two-part article featuring commonly-asked questions.
Q: As a sales and marketing executive with a financial institution, I am paid a basic salary and sales commission and am not entitled to any claims (petrol, toll, parking and car maintenance). I use my own car to do my job. My average monthly expenses for sales and marketing activities are about RM500.
I understand that with the new provisions under Budget 2009, the employee is entitled to tax exemption for certain benefits. Since my company does not provide such benefits, can I claim marketing and travelling expenses under “Perbelanjaan Keraian”?
A: The actual amount you incurred can only be deducted provided that you received either entertainment or travelling allowances from your company. In your case, the amount you incurred is not deductible.
I understand that meal allowances can only be claimed for tax relief for outstation travel or overtime. I am being transferred to a branch in Klang next month from my present workplace in Puchong, and my employer has agreed to give me an additional monthly amount of RM800 as meal allowance.
Can I deduct my meal allowances since I reside in Subang Jaya and don’t do overtime? My working hours are 9am-5pm and I work six days a week.
Your meal allowance for employment in the Klang branch will not be eligible for deduction as it is not in respect of working overtime or travelling outstation.
What are the tax exempt employee benefits in relation to employees who have been given a fully-expensed company car and a company petrol card? I know that I will be assessed on the Scale Car and Fuel benefits for the use of the company car. For YA2008, am I entitled to the relief of RM2,400 for the tax exempt petrol card?
If so, can this RM2,400 be deducted from the Scale Fuel charge in YA2008 so that the Scale Fuel benefit assessed in the tax year will be lowered by RM2,400?
If (1) above is allowed and my actual petrol card expenses for the year exceed RM2,400, can the balance of actual petrol bills spent under the petrol card be deducted from the Scale Fuel benefit up to the maximum of exhausting the amount of the Scale Fuel benefit?
The benefits in kind with regards to the car benefit and fuel benefit are to be taxed. These cannot be deducted as additional tax exempt benefits.
Monthly parking claims and fixed mobile-phone allowances are submitted to my company at the end of the month and these will be reimbursed into our salary in the following month. These claims are subject to EPF contribution. Therefore, are they tax-exempt for YA2008 and do they need to be disclosed under the tax-exempt benefits in the EA form?
Both parking and phone allowances up to the actual amounts incurred which are borne by the employer are tax exempt with effect from YA2008. The amount is to be disclosed as tax exempt benefits in the EA Form.
Can interest on housing loans and car loans be deducted from gross salary on the EA form? Are medical expenses such as maternity expenses deductible?
Interest on housing and car loans are deductible only if paid by the employer on a total loan amount of up to RM300,000. Similarly, medical expenses are only deductible if the amount incurred has been paid by the employer and this benefit is extended to maternity and traditional medical expenses. However, should these expenses be paid personally by the employee, they are not tax deductible.
My organisation is a resident company and our expatriate Japanese director and technical manager has two types of income – salary from Malaysia and salary from Japan. Please advise whether we have to declare our Japanese director’s income in total (i.e. Malaysia and Japan) or just Malaysia-derived income to the Malaysian government?
All employment income derived by the Japanese expatriate for exercising employment in Malaysia is subject to income tax, including the amount paid in Japan, if it is related to the exercising of employment in Malaysia.
Is the tax benefit on childcare allowance up to RM2,400 a year to be deducted directly from the EA form? Is this applicable if there is no such benefit from the company I work for?
The childcare allowance is only tax exempted if you receive such an allowance from your employer; otherwise the exemption will not be applicable to you.
In the event you do receive the childcare allowance, the amount (the lower of the actual amount received or RM2,400) is to be excluded from the employment income and disclosed in section C1 of the Form BE.
I bought a comprehensive insurance policy (life + medical + investment) and the insurer is unable to split the premium payment into life insurance and medical insurance. Can I treat this totally as a medical premium as I have already disclosed RM6,000 for my life insurance premium and EPF deduction?
In the event that the amount cannot be segregated, the amount is to be disclosed either as life or medical insurance premiums based on the description stated in the insurance premium receipt.