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Questions and Answers
Benefits in Kind (BIK) may include items such as cars and __________.
Benefits in Kind (BIK) may include items such as cars and __________.
handphone
Wages, salary, and __________ received from employment are subject to Malaysian tax.
Wages, salary, and __________ received from employment are subject to Malaysian tax.
commission
Any amount received for loss of __________ is subject to certain exemptions.
Any amount received for loss of __________ is subject to certain exemptions.
employment
Value of living accommodation provided by an __________ may be subject to taxation.
Value of living accommodation provided by an __________ may be subject to taxation.
A pension or provident fund that is __________ is considered for taxation purposes.
A pension or provident fund that is __________ is considered for taxation purposes.
Perquisites are defined as additional benefits provided by an employer, including __________.
Perquisites are defined as additional benefits provided by an employer, including __________.
Rules for non-taxable benefits often include certain __________ provided by the employer.
Rules for non-taxable benefits often include certain __________ provided by the employer.
Employment income is regarded as derived from __________ when the employee is resident in Malaysia.
Employment income is regarded as derived from __________ when the employee is resident in Malaysia.
Gross income from employment includes any amount equivalent to the ______ provided to the employee.
Gross income from employment includes any amount equivalent to the ______ provided to the employee.
BIKs are benefits not convertible into ______, even though they have monetary value.
BIKs are benefits not convertible into ______, even though they have monetary value.
The phrase not convertible into money means that the benefit cannot be ______, assigned or exchanged for cash.
The phrase not convertible into money means that the benefit cannot be ______, assigned or exchanged for cash.
Examples of exempt BIKs include dental benefit, child-care benefit, and free ______ provided by the employer.
Examples of exempt BIKs include dental benefit, child-care benefit, and free ______ provided by the employer.
Accommodation provided to an employee is covered under paragraph 13(1)(______) of the ITA.
Accommodation provided to an employee is covered under paragraph 13(1)(______) of the ITA.
Tax exemption does not apply if the employee has ______ over his employer.
Tax exemption does not apply if the employee has ______ over his employer.
The power of an employee to control a company is through holding shares or possession of ______ power.
The power of an employee to control a company is through holding shares or possession of ______ power.
In the context of company affairs, they must be conducted in accordance with the ______ of the employee.
In the context of company affairs, they must be conducted in accordance with the ______ of the employee.
For a partnership, the employee is a partner of the ______.
For a partnership, the employee is a partner of the ______.
For a sole proprietor, the employee and the employer is the same ______.
For a sole proprietor, the employee and the employer is the same ______.
Perquisites are benefits in cash or in kind which are convertible into ______.
Perquisites are benefits in cash or in kind which are convertible into ______.
Perquisites can be received regularly or ______.
Perquisites can be received regularly or ______.
A perquisite is subject to tax only if it arises in respect of having or ______ an employment.
A perquisite is subject to tax only if it arises in respect of having or ______ an employment.
Chargeable income affects what tax rate will be charged with, which can ultimately help reduce the amount of ______ have to pay.
Chargeable income affects what tax rate will be charged with, which can ultimately help reduce the amount of ______ have to pay.
Items received in kind must have money's worth and are ______ into money.
Items received in kind must have money's worth and are ______ into money.
Personal tax relief allows individual tax payer to reduce chargeable ______.
Personal tax relief allows individual tax payer to reduce chargeable ______.
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Study Notes
Employment Relationships
- In a partnership, the employee acts as a partner to the employer.
- A sole proprietor operates with the employee being the same as the employer.
Perquisites Overview
- Perquisites (perks) are benefits received by employees either in cash or kind.
- Subject to taxation under paragraph 4(b) of the Income Tax Act (ITA) as part of gross income from employment.
- Perks include any items that can be converted into cash or have monetary value.
- Can be received regularly or casually.
Personal Tax Relief, Deductions, and Rebates
- Allow individuals to lower their chargeable income, directly influencing tax rates.
- Reducing chargeable income can ultimately decrease tax liabilities.
Personal Reliefs for YA2023
- Specific guidelines are available for claiming personal reliefs in the Year of Assessment 2023.
Benefits-in-Kind (BIKs)
- BIKs are non-cash benefits provided by employers to employees.
- They are included in gross income from employment under paragraph 13(1)(b) of the ITA.
- BIKs cannot be converted into cash; their value cannot be sold or exchanged.
Tax Exemption for BIKs
- Certain BIKs are exempt from tax, such as:
- Dental benefits.
- Childcare benefits, including centers provided by employers.
- Free food and drinks.
- Free transportation to/from work.
- Accommodation benefits are regulated under paragraph 13(1)(c) of the ITA.
Tax Exemption Limitations
- Tax exemption on BIKs does not apply if employees hold control over their employers, usually through shareholding or voting power.
Derivation of Employment Income
- Employment income is taxed in Malaysia if:
- The employee works as a director or under paid leave in Malaysia.
- Duties are performed outside Malaysia but are incidental to employment in Malaysia.
- Employee works on board an aircraft or ship operated by a Malaysian resident.
Components of Employment Income
- Includes wages, salaries, bonuses, commissions, and gratuities.
- Covers value of living accommodation (VOLA) provided by the employer.
- Involves benefits in-kind like cars or mobile phones received from the employer.
- Also encompasses amounts from pensions or provident funds that are unapproved.
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